Which item is correct concerning the risk of material misstatement?
A)Risk of material misstatement arises because audit procedures have been misapplied.
B)Risk of material misstatement can be controlled and changed by the auditor.
C)Risk of material misstatement must be assessed in non-quantitative terms.
D)Risk of material misstatement is controllable by the client.

Question

Quizplus · Accepted Answer

The risk of material misstatement is primarily under the control of the client because it arises from the client's financial reporting process and the possibility that the financial statements may be materially misstated due to error or fraud. The auditor assesses this risk to plan the audit but cannot control it.

Which Item Is Correct Concerning the Risk of Material Misstatement