Define client business risk and describe several sources of client business risk. What is the? auditor's primary concern when evaluating client business? risk?
?First, select the definition that best describes client business risk.
A. Client business risk is a measure of the? auditor's assessment of the likelihood that there are material misstatements in a segment before considering the effectiveness of internal control.
B. Client business risk is an overall approach to the audit that considers the nature of the? client, risk of significant? misstatements, and other factors such as the number of client locations and past effectiveness of client controls.
C. Client business risk is a measure of how willing the auditor is to accept that the financial statements may be materially misstated after the audit is completed and an unqualified opinion has been issued.
D. Client business risk is the risk that the client will fail to achieve its objectives.