Acceptable audit risk is a measure of
A)the auditor's assessment of the likelihood that a material misstatement might occur in the first place.
B)the probability that the financial statements contain errors.
C)how willing the auditor is to accept that the financial statements may be materially misstated after the audit is completed.
D)the probability that errors in the financial statements that were not detected by the internal controls of the firm are not detected by the auditor.

Question

Quizplus · Accepted Answer

Acceptable audit risk is a measure of how willing the auditor is to accept that the financial statements may be materially misstated after the audit is completed. This means that the auditor has considered the risk of material misstatement and is willing to accept a certain level of risk that the financial statements contain errors, but only up to a certain threshold. The level of acceptable audit risk is determined based on the auditor's professional judgment and the specific circumstances of the audit engagement.

Acceptable Audit Risk Is a Measure of