The risk of incorrect acceptance and the risk of overreliance (Type II Errors)relate to the:
A)preliminary estimates of materiality levels.
B)allowable risk of tolerable error.
C)efficiency of the audit.
D)effectiveness of the audit.

Question

Quizplus · Accepted Answer

The risk of incorrect acceptance and the risk of overreliance (Type II Errors) relate to the effectiveness of the audit because they involve the auditor's decision that could potentially accept a financial statement as fair when there are material misstatements present, or rely too much on internal controls when they are not effective.

The Risk of Incorrect Acceptance and the Risk of Overreliance