Control Risk Is

question 88

Multiple Choice

Control risk is

• A)the probability that the auditor will render an unqualified opinion on financial statements that are materially misstated
• B)associated with the unique characteristics of the business or industry of the client
• C)the likelihood that the control structure is flawed because controls are either absent or inadequate to prevent or detect errors in the accounts
• D)the risk that errors not detected or prevented by the control structure will also not be detected by the auditor

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Definitions:

Past Five Years

The phrase typically refers to the most recent five-year period up to the current date, often used in analyses or comparisons over time.

Debt-equity Ratio

An indicator measuring the relative funding of a company's assets from debt versus shareholders' equity.

Weighted Average Cost

An inventory valuation method that assigns a cost to inventory and goods sold based on the average cost of all similar goods available during a specific period.

Tax Rate

The determined percentage of earnings that an individual or a corporation must contribute as tax.