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List and define the different major categories of risk events

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter3: Internal Control Over Financial Reporting: Responsibilities Of Management And The External Auditor

Section: Chapter Questions

Problem 10RQSC

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Question

List and define the different major categories of risk events

Expert Solution

Step 1: INTRODUCTION

Risk can be defined as the variability of returns. When the variability of the return is high, in that case risk is also high. When the variability of the return is low, in that case risk is also low.

Risk of project is measured by the standard deviation or the variance.

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