The risk the auditor is willing to take of accepting a balance as correct when the True misstatement in the balance under audit is greater than the tolerable misstatement is
A)the upper bound.
B)the tolerable risk.
C)the acceptable risk of incorrect acceptance.
D)the lower bound.

Question

Quizplus · Accepted Answer

The acceptable risk of incorrect acceptance is the risk that the auditor is willing to take of accepting a balance as correct when the true misstatement in the balance is greater than the tolerable misstatement. This risk is set by the auditor based on their professional judgment and is influenced by the risk of material misstatement, the quality of the entity's internal controls, and other factors. The tolerable risk and upper and lower bounds are related concepts, but they do not refer specifically to the risk of incorrect acceptance.

The Risk the Auditor Is Willing to Take of Accepting