Reference no: EM132779730

Problem 1: Which of these would not necessarily be considered to be a risk factor for potential misstatements?

Select one:

Option 1: Profit margin has increased and inventory turnover days has decreased.

Option 2: There is intense price competition in the industry of operation.

Option 3: An employee in the cash office was passed over for a promotion.

Option 4: Segregation of duties is not practiced.

Problem 2: If the sample supports the conclusion that the recorded account balance is materially misstated when it is actually not materially misstated, this is the:

Select one:

Option 1: risk of assessing control risk too high.

Option 2: risk of incorrect rejection.

Option 3: risk of incorrect acceptance.

Option 4: risk of assessing control risk too low.