While performing a substantive test of details during an audit,the auditor determined that the sample results supported the conclusion that the recorded account balance was materially misstated.It was,in fact,not materially misstated.This situation illustrates the risk of:
A)Incorrect acceptance.
B)Incorrect rejection.
C)Assessing control risk too high.
D)Assessing control risk too low.

Question

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This situation illustrates the risk of incorrect rejection, which occurs when the auditor concludes that a misstatement exists in an account balance when in fact it does not. This could be caused by sample error or the auditor's failure to recognize the true nature of the account balance. Incorrect acceptance (A) would occur if the auditor concludes that the account balance is not materially misstated when it actually is, and this would be a more serious risk. Assessing control risk too high (C) would result in a greater testing of controls and a lower level of detection risk, but it would not necessarily lead to an incorrect conclusion about the account balance itself. Assessing control risk too low (D) might lead to reduced testing of controls and a higher level of detection risk, but it would not necessarily lead to an incorrect conclusion about the account balance itself.

While Performing a Substantive Test of Details During an Audit,the