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An auditor knows that an audit client operating in an industry in which common stock is valued based on the price-earnings ratio will soon make an initial public offering. All of the following are true except:

A. Materiality should be reduced.

B. Risk of material misstatement should increase.

C. Detection risk should increase.

D. Audit risk should increase.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M942550

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