Which of the following is not an important consideration in an auditor's evaluation of an entity's business risk?
A) The specific business risks that an entity faces may result in financial report errors and fraud.
B) Business risk factors affect the ability of an entity to be profitable and survive.
C) Auditing standards include many entity business risk factors that identify circumstances that increase the likelihood of material misstatements.
D) Auditing standards require the auditor to evaluate the entity's business risk in order to provide suggestions to improve the entity's profitability.

Question

Quizplus · Accepted Answer

Auditing standards require the auditor to evaluate the entity's business risk in order to identify areas of the financial statements that may be more susceptible to material misstatements. The purpose of this evaluation is to design audit procedures that address the identified risks, not to provide suggestions to improve the entity's profitability.

Which of the Following Is Not an Important Consideration in an Auditor's