Why is the auditor more concerned with the risk of assessing control risk too low rather than the risk of assessing control risk too high?
A) The risk of assessing control risk too high is not a type of sampling risk.
B) The risk of assessing control risk too low exposes the auditor to an efficiency loss.
C) The risk of assessing control risk too low may result in the auditor's failing to perform sufficient substantive procedures.
D) The risk of assessing control risk too low cannot be measured by the auditor during the sampling process.

Question

Quizplus · Accepted Answer

If the auditor assesses control risk too low, they may rely too heavily on internal controls and perform too few substantive procedures. This increases the risk of material misstatement going undetected, potentially leading to a qualified opinion or even a lawsuit. On the other hand, if the auditor assesses control risk too high, they may perform unnecessary procedures, which could increase the audit cost without adding much value. While both types of risk can have negative consequences, the risk of assessing control risk too low is generally considered more significant because it directly impacts the quality and effectiveness of the audit.

Why Is the Auditor More Concerned with the Risk of Assessing