The Risk of Material Misstatement Is a Function of

question 99

Multiple Choice

The risk of material misstatement is a function of

• A)audit risk and detection risk
• B)inherent risk and control risk
• C)audit risk and inherent risk
• D)control risk and detection risk

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Definitions:

Accounts Payable

Liabilities of a business that are owed to creditors for goods and services purchased on credit.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenues.

Financial Activities

Transactions involving the management of a company's capital, including obtaining funds, repaying debts, and distributing dividends.

Non-operating

This term refers to the revenues and expenses that are not related to the core operations of a business, such as investment income or losses.