Define risk of material misstatement.

Q: Outline the measures used to describe possible loss accurately?

A: The success of a business depends on how accurately they predict future profit or loss arriving…

Q: What are the measures used to describe possible loss accurately?

A: Furthermore, you have the option of paying for your item in equal monthly instalments, guaranteeing…

Q: What items could increase the risk of material misstatement?

A: Risk of material misstatement (ROMM) is a risk that the financial statements when audited will…

Q: How one can identify the respective Loss Exposures in Risk

A: The degree of uncertainty and/or potential financial loss connected with an investment choice is…

Q: Assess the purpose of identifying failure modes with relevant examples in the process of Failure…

A: Failure mode effect and criticality analysis performed as :- The basic assumption when performing…

Q: What disclosures are required for remote likelihood of losses?

A: Likelihood of losses means chance of occuring loss in some future events of the business. Likelihood…

Q: Explain risk of overreliance and risk of underreliance in brief.

A: Due to material misstatement, an auditor probably render  an unqualified opinion on the state of…

Q: “Costs of abnormal spoilage are losses.”Explain.

A: Abnormal spoilage is spoilage that is not inherent in a specific production process and will not…

Q: Define Risk in general

A: In finance, risk is defined as the level of vulnerability that potentially creates financial loss…

Q: Define relevant risk

A: For investors, risks are classified into the following two types: Systematic risk/relevant…

Q: What is event risk?

A: Event risk is the likelihood of a sudden event adversely affecting an organization, industry, or…

Q: Define diversifiable risk

A: Diversifiable risk It is special to a given business or industry. Regularly known in the feeling of…

Q: explain the relationship between hedging and measuring exposure.

A: Hedging is basically a type of risk management strategy through risk can be reduced significantly…

Q: Describe Detection Risk.

A: Risk: It is the uncertainty about the future events of the company. The adverse chances of choosing…

Q: Define the term Loss Contingencies.

A: A loss contingency is incurred by the business based on the result of a future event, such as…

Q: Describe Inherent Risk.

A: Definition:   Audit Planning: Audit planning is the first step in the auditing process. The auditor…

Q: Discuss the risks from equipment failure and how they can be controlled.

A: Under data communication, equipment failure can be defined as the special device or equipment that…

Q: Discuss the risk of material misstatement inthe acquisition and expenditure cycle.

A: Material Misstatement refers to the misleading information in the statement of affairs of the…

Q: Define Operational risk.

A:

Q: Explain precautionary balance

A: Precautionary balance refers to the reserves kept by the firm or individual to meet any contingency.…

Q: What should occur when a low level of Detection Risk is acceptable?

A: Detection risk is the risk that procedures performed to reduce audit risk will not detect a material…

Q: What is Projected Misstatement?

A:

Q: Differentiate between fundamental and technical anomalies.

A: Market anomalies are exceptions to the hypothesis theory of market efficiency.

Q: audit risk.

A: First option is wrong because the inherent risk is the risk of material misstatements that may exist…

Q: Distinguish between: Systematic risk and Unsystematic risk

A: The risks faced by the company arises from both micro as well as macro levels. The risk arising out…

Q: Define Hazard Insurance?

A: Hazard insurance: Hazard insurance is designed to  coverages. Generally it covered against…

Q: What is the Allowable Risk of Over-reliance?

A: Auditor has to test the account balances and classes of transactions and has to do both control…

Q: Identify the weakness and the risk relating to the above.

A: Answer: The weakness is the shortcoming in any process and risk is the factor that result due to…

Q: Risk of material misstatements increases if

A: Please see the next step for the solution

Q: What is the condition of security? Has it been reasonably well maintained or does it show the…

A: Security is a financial instrument, either equity or debt, which has some legal values. Securities…

Q: Define the term spoilage.

A: Definition:   Product costs: The costs incurred to acquire the merchandise, ship the stock, prepare…

Q: Describe a “loss carryforward.” Discuss the uncertainty when it arises.

A:

Q: Define underinvestment problem

A: Underinvestment refers to the situation where company or firm has insufficient investment or can…

Q: Describe the steps to be taken to correct an error.

A: Accounting Error:   It is an unintentional mistake in recording an accounting entry and is…

Q: = preventive controls™

A: 1st option is wrong because it can not be ensured that preventive controls are 100% effective. 2nd…

Q: Distinguish between diversifiable and non-diversifiable risk

A:

Q: Differentiate between systematic and unsystematic risks.

A: Risk refers to the chances or probability of losses due to uncertain situations or conditions. In…

Q: risk of material misstatemen-

A: Risk of material misstatement is the vulnerability of financial statements to errors or frauds that…

Q: Explain how to account for the impairment of a held-tomaturitydebt security.

A: Debt securities: Debt security is money borrowed at a specific rate of interest which must be repaid…

Q: Distinguish between exposure and risk.

A: