When the auditor concludes that the account balance is not materially misstated when,in fact,it is materially misstated,the auditor has committed the:
A)Risk of underreliance.
B)Risk of overreliance.
C)Risk of incorrect acceptance.
D)Risk of incorrect rejection.

Question

Quizplus · Accepted Answer

The risk of incorrect acceptance occurs when the auditor concludes that the account balance is not materially misstated, but in reality, it is materially misstated. This means that the auditor has accepted the financial statement as being materially correct when it is not, which can result in a loss of credibility for the auditor and the financial statements.

When the Auditor Concludes That the Account Balance Is Not