Auditors spend significant time gaining an understanding of their client and the industry in which it operates. It is important to know key terminology related to financial accounting, business organization, and aediting concepts. For each numbered description below, select the concept that best applies. The concepts may be used once, more than once, or not at all. e. The ability of a company to pay its current debts when they fall due. C. A situation in which noncompliance with laws and regulations impacts amounts already included in the funancial statements. 8. Client risk that affects only cash disbursements. h. The analysis of financial information by considering the plausible relationohip among sales revenue and allotted shelf space in agrocery store. A committee of the board of directors responsible for hiring the extemal auditors 1. A comparison of a client s inventory furnover in days with the industry average. Transaction-level risk Liquidity Entity-level risk Direct and material effect Related party Trend analysis Corporate governance Closing procedures Board of directors Audit committee Those charged with corporate governance Analytical procedure Common-size analysis Indirect effect Solvency