Day: December 1, 2025

For each of the following statements, select whether they are true or false in respect of business risk:

A – Business risk is the risk inherent to the company in its operations.
B – Business risk is of no relevance to the auditor. The auditor is only concerned with audit risk.

Select ONE answer:

1. Statement A – True, and Statement B – False
2. Statement A – False, and Statement B – False
3. Statement A – True, and Statement B – True
4. Statement A – False and Statement B – True

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct => Statement B is false – Business risk is of relevance to the auditor as business risks may impact on the financial statements.
2. Not correct
3. Not correct
4. Not correct

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