During the Risk Response Phase of the Audit, an Auditor

question 9

Multiple Choice

During the risk response phase of the audit, an auditor will document

• A) details of audit tests undertaken.
• B) their understanding of their client.
• C) related parties identified.
• D) analytical procedures used to aid in risk identification.

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Definitions:

Substitution Effect

The shift in buying habits because of variations in the prices of different products, causing individuals to substitute pricier options with more affordable ones.

Labor Supply

The total hours that workers are willing and able to work at a given wage rate in an economy.

Time Allocation

The decision about how many hours to spend on different activities, which leads to a decision about how much labor to supply.

Income Effect

The change in an individual’s or economy’s income and how that change affects the quantity demanded of a good or service.