An auditor considers two factors in understanding business risks.They are:
A)The likelihood of a risk occurring and the materiality of the risk.
B)The magnitude of the risk and the type of risk.
C)The likelihood of the risk occurring and the type of risk.
D)The likelihood of a risk occurring and the magnitude the risk.

Question

Quizplus · Accepted Answer

Auditors assess business risks by considering the likelihood of a risk occurring and the magnitude of the risk, as these factors help determine the potential impact on financial statements.

An Auditor Considers Two Factors in Understanding Business Risks