Which of the following statements is correct about audit risk?
A) It is impossible to completely eliminate audit risk.
B) Audit risk is the risk that an auditor expresses an inappropriate opinion when the financial statements are materially stated.
C) Audit risk can be reduced at the risk assessment phase of an audit by identifying the key risks faced by the client.
D) all of the above

Question

Quizplus · Accepted Answer

Option A is correct because audit risk can never be completely eliminated, as there is always some level of uncertainty involved in any audit.
Option B is correct because audit risk is the risk that an auditor gives an incorrect opinion when the financial statements are materially misstated, and this risk can never be entirely eradicated.
Option C is correct because audit risk can be minimized by identifying the significant risks that the client faces to focus the audit work on areas that may present the greatest risk of material misstatement. Therefore, all of the given options are correct.

Which of the Following Statements Is Correct About Audit Risk