A measure of how willing the auditor is to accept that the financial statements may be materially misstated after the audit is completed and an unmodified opinion has been issued is the
A)inherent risk.
B)audit risk.
C)statistical risk.
D)financial risk.

Question

Quizplus · Accepted Answer

The measure described in the question is referring to the level of audit risk. Audit risk is the risk that the auditor will issue an unmodified opinion on financial statements that are materially misstated. It is composed of inherent risk, control risk, and detection risk. Once the auditor has issued the unmodified opinion, the level of audit risk would reflect the auditor's willingness to accept the risk that the financial statements may still be materially misstated despite the auditor's procedures. Therefore, the best choice is B, audit risk. The other answer choices are not appropriate because inherent risk refers to the risk of material misstatement before considering the effectiveness of internal controls, statistical risk is not a commonly used term in auditing, and financial risk refers to a company's ability to meet its financial obligations.

A Measure of How Willing the Auditor Is to Accept