INHERENT RISK Definition

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INHERENT RISK, generally, it is the risk found in the environment and in human activities that is part of existence. In accounting, it is the susceptibility of an audit area to error which could be material, individually or in combination with other errors, assuming that there are no related internal controls.

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SETUP COST see FIXED CHARGE.

EXTRAORDINARY ITEMS are material items that are unusual in nature and occur infrequently. Both characteristics must exist for an item to be classified as an extraordinary item on the income statement.

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