The audit team decided to reduce planned reliance on internal controls based on the results of attributes sampling.However,the actual rate of deviation in the population is lower than the tolerable rate of deviation.Which type of risk and loss is the audit team exposed to?
A)Risk of overreliance; efficiency loss.
B)Risk of underreliance; effectiveness loss.
C)Risk of overreliance; effectiveness loss.
D)Risk of underreliance; efficiency loss.

Question

Quizplus · Accepted Answer

The audit team is exposed to the risk of underreliance and efficiency loss because they reduced reliance on controls despite the actual deviation rate being acceptable, leading to unnecessary additional testing.

The Audit Team Decided to Reduce Planned Reliance on Internal