An Auditor Learns That a Client's Employee in Control of Inventory

question 41

Multiple Choice

An auditor learns that a client's employee in control of inventory gets divorced and is responsible for paying a large amount of child support.All of the following for the audit of inventory likely are true except:

• A) Fraud risk increases.
• B) The risk of misappropriation of assets increases.
• C) Risk of material misstatement increases.
• D) Detection risk increases.

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Definitions:

Market Costs

Expenses associated with buying, selling, and producing goods or services within a market economy.

Pollutants

Substances that contaminate the natural environment, causing harmful effects on living organisms and ecosystems.

East Coasts

The term "East Coasts" typically refers to the eastern seaboard of a continent, often associated with the Atlantic Coast in the context of the United States, marked by significant historical, cultural, and economic developments.

Carbon Dioxide Emissions

The release of CO2 into the atmosphere, primarily from burning fossil fuels for energy, which contributes to global warming and climate change.