Answer:
The correct answer is letter "B": utilitarian approach.
Explanation:
The utilitarian approach is a corporate practice by which managers make benefit/costs decision attempting to maximize the benefits by minimizing the costs. This approach is implemented to safeguard stakeholders' investments which represents one of the main sources of income for the company to keep their operations up.
<span>A. An auditor can accept the uncertainties in the sampling process since they have some idea in which financial statements errors are occurring. In this case their sample is not completely random.
B. The formula AR = IR Ă— CR Ă— DR is often used to describe audit risk. Here, AR is audit risk, IR is inherent risk, CR is control risk, and DR is detection risk. Inherent risk is the risk of a report containing errors due to the complex nature of how the audited business runs. Control risk is the risk that an error may occur but may not be detected by the business itself. Detection risk is the risk that the auditor may fail to find errors that are present in the business' financial reports.
C. An auditor may only sample, or inspect a fraction of a company's financial history. This is done for practical purposes, for there may not be enough time to inspect everything, or it may be too costly. If the auditor is issuing a test of controls, in which they are scrutinizing their target's internal procedures for detecting errors, then sampling may fail to see these errors.</span>
D Bc it is d is why it is d is correct
