What Is Inherent Risk

question 1

Multiple Choice

What is inherent risk?

• A)The probability that some accounts are more susceptible to misstatement than others.
• B)The probability that the client's internal control policies and procedures will fail to detect material misstatements.
• C)The probability that material misstatements have occurred in transactions entering the accounting system used to develop financial statements.
• D)The probability that the auditor may not detect material misstatements in the financial statements.

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Definitions:

Emotional Timing

The appropriate or effective management and expression of emotions in various situations, considering context and interpersonal dynamics.

Emotional Quotient

A measure of a person's ability to recognize and manage their emotions and the emotions of others.

Situational Timing

The identification of the most appropriate or opportune moment to take action within a specific context.

Prejudice

Preconceived opinion or judgment towards people, groups, or subjects, often based on stereotypes and without factual justification.