Step 2 of the Planning Process Is the Risk Assessment

question 89

Multiple Choice

Step 2 of the planning process is the risk assessment phase.At this stage of the planning process the objective of the auditor is to identify and assess the risk of material misstatement.The auditor does this by

• A)gaining an understanding of the company and its management,including the company's financial controls
• B)gaining an understanding of the company's industry,including the company's competition
• C)developing an audit strategy to respond to the risk of material misstatement
• D)performing risk assessment procedures to assess the risk of material misstatement at the financial statement and assertion level

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Definitions:

Compensation

Monetary or non-monetary benefits provided to an employee or contractor in exchange for their services or to compensate for losses or damages suffered.

Automatic Disbarment

The compulsory removal or expulsion of a lawyer from the bar association or the legal profession, triggered by certain actions without the need for a formal proceeding.

Lawyer's Conduct

The ethical and professional behavior expected of lawyers, governed by legal standards and professional bodies to ensure integrity and competence.

Law Complexity

Law Complexity refers to the intricate nature of legal principles, statutes, and regulations, which can vary widely by jurisdiction and area of law.