The Ultimate Purpose of Control Risk Assessment Is To

question 27

Multiple Choice

The ultimate purpose of control risk assessment is to:

• A)Estimate the overall risk of failing to detect material misstatements.
• B)Decide the nature,timing,and extent of further audit procedures.
• C)Determine the risk of incorrect acceptance.
• D)Determine the probability that errors entered the accounts.

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Definitions:

Industry's Demand

The total demand for all the products or services provided by a specific sector of the economy.

Marginal Decision Rule

A principle used in economics and decision-making that recommends comparing the additional benefits of a decision or action to its additional costs.

Downward Sloping

Characteristic of a graph indicating that as one variable increases, the other variable decreases, common in demand curves.

Demand

The quantity of a particular good or service that consumers are willing and able to purchase at various prices.