Why does the risk of incorrect rejection result in an efficiency loss to the auditor?
A)Additional time is necessary to propose adjustments to the client's account balances.
B)The auditor typically expands the sample to examine additional components or transactions of the account balance.
C)More detailed audit procedures are performed on sample items already examined by the auditor.
D)The auditor typically extends the study of internal control to attempt to obtain a reduction in the level of risk of material misstatement.

Question

Quizplus · Accepted Answer

The risk of incorrect rejection leads the auditor to expand the sample size to gather more evidence, which increases the time and resources spent, thus resulting in an efficiency loss.

Why Does the Risk of Incorrect Rejection Result in an Efficiency