Significant Developments in the Client's External Environment That Affect Audit

question 17

Multiple Choice

Significant developments in the client's external environment that affect audit strategy include:

• A) Industry competition has increased.
• B) Acquisitions or discontinued operations have recently occurred.
• C) A change in ownership and/or capital structure has occurred.
• D) All of the above

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Definitions:

Acceptable

Considered satisfactory or adequate; meeting the required standards.

Risk-taking

The willingness to engage in actions that can lead to significant gains or losses, embracing the potential for failure as a path to success.

High Trust

A condition or environment in which individuals or parties have a strong belief in the reliability, integrity, and competence of each other.

Social Loafing

A phenomenon wherein people put forth less effort when they work in teams than when they work alone.