Which of the following exists independently from an audit?
A) risk-free interest rate and business risk
B) information risk and the risk-free interest rate
C) business risk and information risk
D) risk-free interest rate and audit risk

Question

Quizplus · Accepted Answer

Risk-free interest rate and business risk exist independently from an audit. The risk-free interest rate is a theoretical rate of return of an investment with zero risk, typically associated with government bonds, and does not depend on audit activities. Business risk refers to the potential that a company will have lower than anticipated profits or experience a loss rather than making a profit, which is also independent of the auditing process.

Which of the Following Exists Independently from an Audit