When There Is a Significant Risk That an Account Will

question 8

Multiple Choice

When there is a significant risk that an account will be misstated and the client's system of internal controls is not considered effective at reducing that risk,

• A) less high quality evidence is gathered when conducting substantive tests.
• B) detection risk is set as high.
• C) detection risk is set as low.
• D) none of the above

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Definitions:

Account Management Policy Grid

A strategic framework used to classify and manage a company's customers or accounts based on their value and the complexity of the account to optimize service and resources.

Level of Opportunity

The extent to which an environment or situation provides individuals or organizations with the possibility to achieve success or advance their goals.

Competitive Sales Position

A company's strategic advantage in the market based on factors such as product quality, price, and customer service, which enables it to outsell its competitors.

Unilateral Mistake

A mistake by one party to the agreement.