Which of the Following Is Not a Likely Reason Why

question 10

Multiple Choice

Which of the following is not a likely reason why an audit firm does not possess the necessary resources to perform an audit engagement?

• A) The client company is very large and has multiple geographic locations.
• B) The client company is in a highly regulated industry for which significant industry expertise is required.
• C) The client company has a very complex IT system for which significant technical expertise is required.
• D) The client company has a decentralized structure for providing management oversight.

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Definitions:

Two-tail Test

A statistical hypothesis test in which the critical area of a distribution is two-sided and tests whether a sample is greater or less than a range of values.

Sample Variances

Statistical measurements that quantify the dispersion or spread of data points within a sample from their mean.

F Test

A statistical test used to compare the variances of two populations and determine if they are significantly different from each other.

Significance Level

A threshold within hypothesis testing that defines the probability of rejecting the null hypothesis when it is actually true, denoted by alpha.