When performing the substantive tests on an account balance,the auditor is concerned about two aspects of sampling-based decision errors: (1)the risk of incorrect rejection (RIR)and (2)the risk of incorrect acceptance (RIA).Which of the following is true about RIR and RIA?
A)RIR is of greater concern to the auditor than the RIA.
B)RIA is of greater concern to the auditor than the RIR.
C)RIA and the RIR are of equal importance to the auditor.
D)Neither the RIR nor the RIA need be considered by the auditor.

Question

Quizplus · Accepted Answer

RIA is of greater concern because it relates to the risk that the auditor concludes that a material misstatement does not exist when, in fact, it does. This could lead to the auditor issuing an incorrect opinion on the financial statements, which is a significant concern.

When Performing the Substantive Tests on an Account Balance,the Auditor