During the audit of Teddy Company, the external auditor, Spring, has noted from the planning session with the audit team that it is important to properly identify entity$-$level and transaction$-$level risks. However, as this is Spring's first audit engagement, Spring is having a difficult time making a distinction between the two, so Spring consulted with the audit manager for examples. Which of the following is the best response from the audit manager?

An entity$-$level risk is that which affects multiple accounts and assertions. An