A measure of how willing the auditor is to accept that the financial statements may be materially misstated after the audit is completed and an unqualified opinion has been issued is the
A) inherent risk.
B) acceptable audit risk.
C) statistical risk.
D) financial risk.

Question

Quizplus · Accepted Answer

Acceptable audit risk refers to the level of risk that the auditor is willing to accept that the financial statements may contain material misstatements after issuing an unqualified opinion. This risk is set by the auditor and is influenced by factors such as the nature of the entity's business, the auditor's assessment of the entity's internal controls, and the auditor's professional judgment. Inherent risk refers to the risk of material misstatement before considering the effectiveness of internal controls. Statistical risk is not a commonly used term in auditing, and financial risk refers more to the risk of financial loss due to economic or financial factors.

A Measure of How Willing the Auditor Is to Accept