The risk that an auditor concludes that a material misstatement does not exist when it does will result in an
A) increased risk that the audit will not be effective.
B) increased risk that the audit will be inefficient.
C) increase in the auditor's assessment of the risk of material misstatement.
D) none of the above

Question

Quizplus · Accepted Answer

If the auditor concludes that a material misstatement does not exist when it does, there is an increased risk that the audit will not be effective as it could result in a failure to detect and correct a material misstatement, which could ultimately harm the reliability of the financial statements.

The Risk That an Auditor Concludes That a Material Misstatement