Which one of the following measures how willing the auditor is to accept that the financial statements may be materially misstated after the audit is completed and an unqualified opinion has been issued?
A) financial risk.
B) inherent risk
C) statistical risk
D) acceptable audit risk

Question

Quizplus · Accepted Answer

Acceptable audit risk is the measure of the auditor's willingness to accept the risk of undiscovered material misstatements in the financial statements after issuing an unqualified opinion. It considers the inherent risk, control risk, and detection risk in determining the overall audit risk. Therefore, it is the best choice for the given scenario. Financial risk is the risk of loss due to a firm's financial structure, while inherent risk refers to the risk of material misstatement in the absence of any internal controls. Statistical risk is not a recognized concept in auditing.

Which One of the Following Measures How Willing the Auditor