Why is the auditor more concerned with the risk of overreliance than the risk of underreliance?
A)The risk of underreliance is not a type of sampling risk.
B)The risk of overreliance exposes the auditor to an efficiency loss.
C)The risk of overreliance may result in the auditor failing to perform sufficient substantive procedures.
D)The risk of overreliance cannot be controlled by the auditor during the sampling process.

Question

Quizplus · Accepted Answer

The risk of overreliance could lead to the auditor failing to detect material misstatements, which could result in an inaccurate report. This risk can be controlled by performing sufficient substantive procedures. On the other hand, the risk of underreliance is simply an inefficiency where the auditor performs more work than necessary. As such, the auditor is more concerned with the risk of overreliance.

Why Is the Auditor More Concerned with the Risk of Overreliance