Which of the following is not true with respect to the risk of incorrect acceptance?
A)It results in an efficiency loss to the auditor.
B)It occurs when the auditor's sample indicates that the account balance is fairly stated.
C)It occurs when the true misstatement in the account balance exceeds tolerable misstatement.
D)The auditor can measure the exposure to this risk when using statistical sampling applications.

Question

Quizplus · Accepted Answer

The risk of incorrect acceptance results in an effectiveness loss, not an efficiency loss, because it means the auditor may incorrectly conclude that the financial statements are free of material misstatement when they are not.

Which of the Following Is Not True with Respect to the Risk