Which of the following statements regarding the risk-based reasoning (RBR)matrix is FALSE?
A)The RBR matrix is an attempt to summarize all the possibilities of accounting uncertainties that an auditor may encounter and classify them by reporting types.
B)The RBR matrix focuses on AudR levels.
C)Under the RBR system of risk-based reasoning for accounting estimates,there are three possible ranges or regions of probabilities of payoffs to consider.
D)The main use of the RBR matrix is to provide a convenient decision aid for any reporting situation involving future events.

Question

Quizplus · Accepted Answer

The RBR matrix does not focus on AudR levels; rather, it provides a framework for assessing the risk associated with accounting uncertainties and making decisions based on those assessments. The other statements are true: the RBR matrix attempts to summarize all possibilities of accounting uncertainties and classify them by reporting type, there are three regions of probabilities to consider, and the matrix is a decision aid for reporting situations involving future events.

Which of the Following Statements Regarding the Risk-Based Reasoning (RBR)matrix