Which of the Following Statements Is Correct About Audit Risk

question 4

Multiple Choice

Which of the following statements is correct about audit risk?

• A) It is impossible to completely eliminate audit risk.
• B) Audit risk is the risk that an auditor expresses an inappropriate opinion when thefinancial statements are materially stated.
• C) Audit risk can be reduced at the planning stage of an audit by identifying the key risks faced by the client.
• D) All of the above.

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Definitions:

Buying Criteria

The set of attributes or characteristics that consumers consider when deciding to purchase a product or service, such as price, quality, and brand reputation.

Resource-Based View

A strategic management approach focusing on leveraging a firm's internal resources and capabilities to gain competitive advantage.

Market-Based View

A strategic perspective that emphasizes the importance of external market positioning and competitive forces in determining firm success.

Firm-Level Success

A measure of a company's financial and market performance relative to its goals and competitors.