AUDIT RISK Definition

AUDIT RISK is a combination of the risk that material errors will occur in the accounting process and the risk the errors will not be discovered by audit tests. Audit risk includes uncertainties due to sampling (sampling risk) and to other factors (non-sampling risk).

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PRESCRIBED SECURITY generally means any bond, debenture, stock, stock certificate, Treasury bill or other like security, or any coupon, warrant or other document for the payment of money in respect of such a security, issued by a government authority.

ENTITY BOUNDARY is that which is legally included within or excluded from a defined entity.

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