Risk Assessment Should Evaluate Whether Controls Sufficiently Address Identified Risks

question 123

Multiple Choice

Risk assessment should evaluate whether controls sufficiently address identified risks of material misstatements due to fraud and

• A) controls specifically designed to prevent fraud.
• B) controls intended to address the risk of collusion.
• C) controls intended to address the risk of management override of these controls.
• D) controls specifically designed to prevent material misstatements.

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Definitions:

Wages Payable

A liability account that records the amounts owed to employees for work that has been performed but not yet paid.

Biweekly Salaries

Compensation paid to employees on a two-week basis, typically resulting in 26 pay periods per year.

Fiscal Period

A specific time frame, such as a month, quarter, or year, used for financial accounting and reporting purposes.

Salary Expense

The total expense incurred by a company to compensate its employees on a salaried basis during a specific period.