The likelihood of assessing control risk too high is the risk that the sample selected to test controls
A) Does not support the auditor's planned assessed level of control risk when the true operating effectiveness of internal control justifies such an assessment.
B) Contains misstatements that could be material to the financial statements when aggregated with misstatements in other account balances or transactions classes.
C) Contains proportionately fewer deviations from prescribed internal controls than exist in the balance or class as a whole.
D) Does not support the tolerable misstatement for some or all of management's assertions.

Question

Quizplus · Accepted Answer

If the sample selected to test controls does not support the auditor's planned assessed level of control risk when the true operating effectiveness of internal control justifies such an assessment, then the auditor may assess control risk too high. This means that the auditor may conclude that internal controls are not effective in preventing or detecting material misstatements when they actually are effective, leading to an incorrect assessment of control risk. Choices B, C, and D describe other risks but do not relate specifically to assessing control risk too high.

The Likelihood of Assessing Control Risk Too High Is the Risk