When Assessing the Risk of Material Misstatements in the Financial

question 8

Multiple Choice

When assessing the risk of material misstatements in the financial statements,

• A) inadequate internal control procedures will mitigate client business risk.
• B) GAAS specifies in detail how much and what type of evidence the auditor needs to obtain.
• C) company management is responsible for determining materiality levels.
• D) the auditor must have an understanding of the client's business and industry.

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Definitions:

Professional-Level Skills

Advanced competencies and knowledge required for performing tasks and duties in a professional setting.

Leaning

The act or state of inclining towards something or someone, either physically or metaphorically, indicating a preference or tendency.

Favorably Disposed

Having a positive or supportive inclination towards someone or something.

Message

Information, ideas, or feelings that are conveyed from one entity to another through various forms of communication.