The First Step in a Risk-Based Audit Approach Is to

question 61

Multiple Choice

The first step in a risk-based audit approach is to

• A)evaluate the control procedures.
• B)determine the threats facing the AIS.
• C)identify the control procedures that should be in place.
• D)evaluate weaknesses to determine their effect on the audit procedures.

---

Definitions:

Liability

An obligation that a corporation or individual has to another entity, typically financial in nature, such as loans or accounts payable.

Asset

Resources owned by an individual or business that have economic value and can be used to meet debts, commitments, or legacies.

Prepaid Rent Expense

An accounting term for rent payments made in advance of the rental period, recorded as an asset on the balance sheet until the period of use.

Adjustment

The process of making entries to correct accounts or to allocate amounts properly at the end of an accounting period.