Which of the following statements is correct about audit risk?
A) It is impossible to completely eliminate audit risk.
B) Audit risk is the risk that an auditor expresses an inappropriate opinion when thefinancial statements are materially stated.
C) Audit risk can be reduced at the planning stage of an audit by identifying the key risks faced by the client.
D) All of the above.

Question

Quizplus · Accepted Answer

A) It is impossible to completely eliminate audit risk.
B) Audit risk is the risk that an auditor expresses an inappropriate opinion when the financial statements are materially stated.
C) Audit risk can be reduced at the planning stage of an audit by identifying the key risks faced by the client.

All of the above statements are correct. Audit risk cannot be completely eliminated as there is always some level of uncertainty in an audit. Audit risk is the risk that an auditor may express an inappropriate opinion on the financial statements, which can be reduced by identifying and addressing key risks during the planning stage of the audit.

Which of the Following Statements Is Correct About Audit Risk