By Assessing Control Risk as High,an Auditor Has Determined That

question 3

Multiple Choice

By assessing control risk as high,an auditor has determined that their client's system of internal controls:

• A)Is very effective at preventing or detecting material misstatements.
• B)Is very strong.
• C)Will eliminate the possibility of material fraud or error.
• D)Is unlikely to be effective in mitigating inherent risks identified.

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Definitions:

Units

The individual items or quantities, often used in the context of production, inventory, or sales.

Net Operating Income

The total profit of a company after operating expenses are subtracted but before deducting interest and taxes.

Planning Budget

A budget prepared for a specific level of activity; it outlines the expected revenues, expenses, and resource requirements for that activity level.

Tenant-Days

A metric used in property management to represent the total number of days in a period that rental units were occupied.