When the financial statements are materially misstated for a particular client, which of the following will constitute an audit risk?
A)An auditor expressing an incorrect audit opinion
B)The discontinuance of an internal process from a previous year
C)Creditors and investors expressing a favorable opinion
D)Some stakeholders not relying on the auditing firm

Question

Quizplus · Accepted Answer

When the financial statements are materially misstated, there is a risk that the auditor may express an incorrect audit opinion, which can lead to legal and financial consequences for the auditor and the client. The other choices do not directly relate to the audit risk in this situation.

When the Financial Statements Are Materially Misstated for a Particular