Which of the Following Is the First Step in the Risk-Based

question 41

Multiple Choice

Which of the following is the first step in the risk-based audit approach?

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

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Definitions:

Investment

The operation of assigning monetary resources with the prospect of earning income or making a profit.

Interest Rate

The amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal, influencing savings and investment decisions.

Solar Heating System

A system that captures sunlight to generate heat, typically used for water heating or space heating in buildings.

Large Profits

Significant earnings that exceed the costs and expenses of operating a business.