Various risks identified have been identified during audit planning that you have been asked to evaluate to assess whether they are significant risks.

part a. Describe what is meant by a significant risk. How is it different than an inherent risk or a business risk?

A. significant risk is an inherent risk that requires special audit consideration. Inherent risk is the risk that the client may not achieve its objectives. Business risk is the susceptibility of an assertion to material misstatement without considering control risk. A business risk may, but does not necessarily result in an inherent risk or significant risk.

B. A significant risk is the susceptibility of an assertion to material misstatement without considering control risk. Inherent risk is a significant risk that requires special audit consideration. Business risk is the risk that the client may not achieve its objectives. A significant risk may, but does not necessarily result in an inherent risk or business risk.

C. A significant risk is an inherent risk that requires special audit consideration. Inherent risk is the susceptibility of an assertion to material misstatement without considering control risk. Business risk is the risk that the client may not achieve its objectives. A business risk may, but does not necessarily result in an inherent risk or significant risk.

D. A significant risk is the risk that the client may not achieve its objectives. Inherent risk is the susceptibility of an assertion to material misstatement without considering control risk. Business risk is an inherent risk that requires special audit consideration. An inherent risk may, but does not necessarily result in an business risk or significant risk.