The greatest impact on audit effectiveness comes from the risk(s) of:
A) overreliance and incorrect rejection.
B) underreliance and incorrect acceptance.
C) overreliance and incorrect acceptance.
D) underreliance and incorrect rejection.

Question

Quizplus · Accepted Answer

The greatest impact on audit effectiveness comes from the risks of overreliance and incorrect acceptance. Overreliance on audit evidence can lead to the auditor missing misstatements, while incorrect acceptance refers to the auditor incorrectly believing that a material misstatement does not exist when it actually does, both of which directly compromise the audit's effectiveness in identifying and addressing material misstatements.

The Greatest Impact on Audit Effectiveness Comes from the Risk(s)