Inherent Risk Is the Susceptibility of a Transaction or Accounting

question 73

True/False

Inherent risk is the susceptibility of a transaction or accounting adjustment to be recorded in error,or for the transaction not to be recorded in the absence of internal controls.

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Definitions:

API GL-5

A specification for lubricating oils set by the American Petroleum Institute (API), indicating suitability for high-load, high-speed conditions.

Lube

Short for lubricant, a substance applied to reduce friction between moving parts in machinery or engines, extending their lifespan.

Geartrain Components

The individual parts that make up a geartrain, including gears, shafts, bearings, and casings, working together to transmit power in machinery.

Abrasive Contaminants

Hard particles or materials that can cause wear or scratching on surfaces they come into contact with, often found in working environments.