Which of the Following Would Not Result in a Lower

question 19

Multiple Choice

Which of the following would not result in a lower level of the risk of incorrect acceptance?

• A)An increase in the acceptable level of audit risk from 5 percent to 10 percent.
• B)The inability of the auditor to rely on the internal control as planned.
• C)An increase in the susceptibility of the account balance to misstatement.
• D)A reduction in the utilization of analytical procedures in the audit examination.

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Definitions:

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing the surplus revenue after accounting for all costs.

Economic Loss

A situation where total costs exceed total revenues, indicating that a firm is not covering its opportunity costs.

Accounting Profit

The calculated income of a business or company after subtracting all explicit costs from total revenues.

Average Variable Cost

Calculated by dividing the total variable costs by the quantity of output produced, representing the variable cost per unit of output.