EXPLAIN MORE AND GIVE AN EXAMPLE OF:

1. Business Failure: occurs when a business is unable to repay its lenders or meet the expectations of its investors because of economic or business conditions, such as a recession, poor management decisions, or unexpected competition in the industry.

2. Audit Failure: occurs when the auditor issues an incorrect audit opinion because it failed to comply with the requirements of auditing standards.

3. Audit risk represents the possibility that the auditor concludes after conducting an adequate audit that the financial statements were fairly stated when, in fact, they were materially misstated.