What Type of Transactions Ordinarily Have High Inherent Risk Because

question 11

Multiple Choice

What type of transactions ordinarily have high inherent risk because they involve management judgments or assumptions in formulating accounting balances?

• A)Estimation.
• B)Nonroutine.
• C)Qualified.
• D)Routine.

---

Definitions:

Effect of Frames

The impact of how information, choices, or situations are presented on people’s perceptions, decisions, and actions.

Risk in Negotiation

The potential for losses or negative outcomes that might occur as a result of engaging in a negotiation process.

Stereotyping

The practice of attributing specific characteristics or behaviors to individuals based on their membership in a particular group, without recognizing individual differences.

Mismatches in Frames

This occurs when there is a misalignment or lack of agreement in perspectives, interpretations, or expectations among parties in a discussion or negotiation.