An Auditor Has Accessed Client Business Risk and the Risk

question 37

Multiple Choice

An auditor has accessed client business risk and the risk to material misstatements to the clients financial statements. These are done in order to:

• A) apply the audit risk model in determining the appropriate audit procedures to perform.
• B) determine the reliance on the company's internal control systems for financial reporting.
• C) determine the test of balances to be performed by the audit team.
• D) assure the CPA firm that they can perform the audit effectively and efficiently,

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Definitions:

Fixed

A term often used in finance and economics to denote something that is constant or unchanging over a period.

Unknown

In research and statistics, it refers to a quantity or a property which needs to be discovered or measured.

Confidence Level

The probability that the value of a parameter falls within a specified range of values, often associated with a confidence interval.

Confidence Interval

A range of values derived from sample data that is likely to contain the true population parameter with a specified level of confidence.