The risk of underreliance is the risk that the sample selected to test controls:
A)Does not support the auditor's planned level of control risk when the true operating effectiveness of the control justifies such an assessment.
B)Contains misstatements that could be material to the financial statements when aggregated with misstatements in other account balances or transaction classes.
C)Contains proportionally fewer monetary errors or deviations from prescribed control procedures than exist in the balance or class as a whole.
D)Does not support the tolerable misstatement for some or all of management's assertions.

Question

Quizplus · Accepted Answer

Underreliance occurs when the auditor concludes that controls are less effective than they actually are, leading to the auditor assessing control risk too high. This can occur if the sample selected to test controls does not support the auditor's planned level of control risk when the true operating effectiveness of the control justifies such an assessment.

The Risk of Underreliance Is the Risk That the Sample