Which of the Below Is an Example of an Inherent

question 56

Multiple Choice

Which of the below is an example of an inherent risk:

• A) the risk that the economy will sink into recession.
• B) the risk that the firm will be a take-over target.
• C) the risk that a particular financial statement account is incorrect.
• D) All of the above.

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Definitions:

Obligations

Duties or responsibilities imposed by law, contract, or moral duty.

Stare Decisis

A legal principle that mandates courts to follow the rulings of previous cases in similar circumstances to ensure consistency in the law.

American Legal System

A system of laws and legal institutions that govern the United States, including the Constitution, statutes, regulations, and court decisions.

Appeals Court

A court that reviews decisions made by lower courts to determine if legal errors were made that could change the outcome of a decision.