If Inherent Risk Is High and No Assurance Has Been

question 40

Multiple Choice

If inherent risk is high and no assurance has been obtained from controls testing:

• A)extensive substantive procedures need to be performed to estimate the dollar value of any error in the account balance.
• B)only overall analytical review procedures need to be performed to reduce detection risk to an acceptable level.
• C)no further substantive testing needs to be performed.
• D)None of the above.

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Definitions:

Curvilinear Relationship

A relationship between two variables where the change in one variable is related to a non-linear change in another variable, often depicted as a curved graph.

Construct Validity

The degree to which a test or instrument measures the theoretical construct it is intended to measure.

Extraverted

Describes a person who is outgoing, sociable, and derives energy from interacting with other people.

Alcohol Exposure

The extent to which an individual comes into contact with alcohol, affecting their physiological and psychological state.