Residual Risk Is Defined as

question 56

Multiple Choice

Residual risk is defined as

• A)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.
• B)the risk that the client's internal controls system will fail to prevent or detect a misstatement.
• C)the risk left in an account balance after application of internal controls.
• D)risk that the audit procedures will fail to detect a material misstatement.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.