Describe what is meant by acceptable audit risk. Explain why each of the following statements is true:
a. A CPA firm should attempt to achieve the same audit risk for all audit clients when circumstances are similar.
b. A CPA firm should decrease acceptable audit risk for audit clients when external users rely heavily on the statements.
c. A CPA firm should decrease acceptable audit risk for audit clients when there is a reasonably high likelihood of a client filing bankruptcy.
d. Different CPA firms should attempt to achieve reasonably similar audit risks for clients with similar circumstances.
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