When an entity moves into a significant new line of business,all of the following increase except:
A) Client risk.
B) Acceptable audit risk.
C) Risk of material misstatement.
D) Entity business risk.

Question

Quizplus · Accepted Answer

Acceptable audit risk should not increase with the entity moving into a significant new line of business. However, client risk, risk of material misstatement, and entity business risk may increase due to the entity's lack of experience and knowledge in the new line of business.

When an Entity Moves into a Significant New Line of Business,all