Using the Audit Risk Model, Identify the Relationship Between the Following

question 2

Essay

Using the audit risk model, identify the relationship between the following elements. For each of the items below, highlight whether the two elements have an inverse relationship, a direct relationship, or no relationship. When considering each item, assume that the other components of the risk model remain constant.

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Definitions:

Total Receipts

The total amount of money received by a business during a specific period, including sales, income, donations, and other forms of revenue.

Subchapter S Corporation

A type of corporation that meets specific Internal Revenue Code requirements and passes income, losses, deductions, and credits to its shareholders for federal tax purposes.

C Corporation

A legal structure for a corporation in which the owners, or shareholders, are taxed separately from the entity, leading to potential double taxation on earnings.

Filing Statement

An official document submitted to a regulatory body or institution, detailing certain financial information or changes in ownership.