Matthias Holewsky Was Explaining How Important It Was for His

question 1

Multiple Choice

Matthias Holewsky was explaining how important it was for his staff to use analytical procedures in order to cut down on substantive testing. He mentioned two factors that he felt
Were important when conducting analytical procedures:
(i) reliability of client data
(ii) the ability to make comparisons over time
Which of these two factors can help him achieve his objective?

• A) (i) only
• B) (ii) only
• C) both (i) and (ii)
• D) neither (i) nor (ii)

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Definitions:

Capital Market Expectations

The forecasted future returns, volatilities, and correlations for the major asset classes, which are essential for the strategic asset allocation process.

Investment Objectives

Define the financial goals and strategies of an investor or an investment fund.

Risk

The potential for loss or unfavorable outcomes in any given situation, often assessed in finance as the variability of returns on investments.

Return

Return refers to the gain or loss on an investment over a specific period, including income received and the change in value, usually expressed as a percentage of the investment’s initial cost.