Inherent Risk Is

question 70

Multiple Choice

Inherent risk is

• A) assessed as high when there are no internal controls tested or relied upon by the auditor.
• B) assessed as low when there are good internal controls in place.
• C) the risk of a misstatement occurring irrespective of any internal controls put in place by management.
• D) the risk that the auditor's testing procedures will not detect a material misstatement.

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Definitions:

Scratch Marks

Linear erosional features on rock surfaces, often caused by the movement of glaciers or other sediment-laden flows.

Plate Boundaries

The edges where two tectonic plates meet, which can lead to geological phenomena such as earthquakes, volcanic activity, and the formation of mountain ranges.

Divergent

Pertains to tectonic plate boundaries that move away from each other, leading to the creation of new crust as magma rises to fill the gap.

Convergent

Pertaining to a tectonic boundary where two or more lithospheric plates move toward each other, commonly resulting in mountain formation, earthquakes, and volcanic activity.