When the Inherent Risk and Control Risk Assessment Is High

question 27

Multiple Choice

When the inherent risk and control risk assessment is high:

• A)minimal substantive tests are performed.
• B)there are no controls tested or relied upon.
• C)the amount of substantive testing is significant.
• D)Both a and c

---

Definitions:

Unearned Subscriptions

Income received in advance for subscriptions that have not yet been fulfilled or services that have not yet been provided.

Revenue Recognition Principle

An accounting principle that outlines the specific conditions under which revenue is recognized.

Unearned Rent Revenue

Income received by a company for rent that has not yet been earned because the service period has not occurred.