In Determining Audit Risk,the Auditor Decides How Much Risk Will

question 64

Multiple Choice

In determining audit risk,the auditor decides how much risk will be taken on by the firm.Which of the following is correct regarding this decision by the auditor?

• A)The auditor may decide to intentionally render an inappropriate opinion.
• B)The auditor may decide not to take the audit engagement.
• C)The auditor may decide to accept audit risk at 100%.
• D)The auditor may decide that engagement risk is an appropriate measure of audit risk.

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Definitions:

Unit Of Account

A standard numerical monetary unit of measurement that provides a uniform measure of the value of goods and services.

Bank Failures

Occurs when a bank is unable to meet its obligations to depositors or creditors and is taken over by a regulatory agency.

New York Federal Reserve

One of the 12 Federal Reserve Banks of the United States, playing a key role in monetary policy, financial supervision and the payments system.

Money Supply

The total quantity of money available in an economy at a specific time, including currency and various types of bank deposits.