Inherent risk is a measure of the firms assessment of the susceptibility of material misstatement before considering
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Question:
Inherent risk is a measure of the firm’s assessment of the susceptibility of material misstatement before considering the effectiveness of internal control. Briefly comment of the following areas that are inherent in auditing a business such as company:
a. Company holds an inventory of high technology items: consumer electronic equipment.
b. Company distributes merchandise to retail stores.
c. Company sells on credit throughout two states.
d. Company rents a number of its stores.
e. Company has a large amount of debt.
f. Company is considering going public.
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