The risk model is defined as AR = IR  CR  DR.The risk of assessing control risk too low can lead to ________.
A)the auditor performing more work than needed,thus wasting resources
B)the auditor failing to do additional work that should be done
C)poor choice of procedures
D)expanding sample sizes required for statistical sampling of account balances

Question

Quizplus · Accepted Answer

Assessing control risk too low means the auditor believes the internal controls are more effective than they actually are, which can lead to inadequate testing of the accuracy and completeness of financial statements. This increases the risk of material misstatement going undetected, which can have a significant impact on the financial statements. Therefore, the best choice is (B) the auditor failing to do additional work that should be done.

The Risk Model Is Defined as AR = IR 