Why is the auditor more concerned with controlling the exposure to the risk of incorrect acceptance than with the risk of incorrect rejection?
A) Only the risk of incorrect acceptance results in an incorrect decision by the auditor.
B) The risk of incorrect rejection is not related to the auditor's substantive procedures.
C) The risk of incorrect rejection can be controlled by performing substantive procedures during the interim period.
D) The risk of incorrect acceptance may ultimately result in the auditor's incorrectly issuing an unqualified opinion on the client's financial statements.

Question

Quizplus · Accepted Answer

The risk of incorrect acceptance is more significant for the auditor because it may ultimately result in the auditor issuing an incorrect unqualified opinion on the client's financial statements. In contrast, the risk of incorrect rejection can usually be remedied by the client providing additional evidence, and can be controlled by performing substantive procedures during the interim period. Therefore, the auditor must focus more on controlling the risk of incorrect acceptance to ensure that the financial statements are fairly presented.

Why Is the Auditor More Concerned with Controlling the Exposure