Control Risk Is

question 6

Multiple Choice

Control risk is:

• A) the susceptibility of an assertion to a misstatement that could be material assuming there are no related controls.
• B) the risk that a client's system of internal controls will not prevent or detect a material misstatement.
• C) the risk that the auditor's testing procedures will not be effective in detecting a material misstatement.\
• D) the risk that fraud has occurred.

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Definitions:

Equilibrium

A market phase where demand is matched by supply, which in turn stabilizes prices.

Limited Resources

The scarcity of resources in comparison to the potentially limitless wants and needs, forcing the need for allocation decisions.

Capacity Utilization Rate

The percentage of a firm's total possible production capacity that is actually being used over a given period.

Global Economy

The interconnected networks of economic activities, trade, and investment transcending national borders, encompassing the production, distribution, and consumption of goods and services worldwide.