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

Question

Quizplus · Accepted Answer

If the auditor assesses control risk too low, they may rely too much on the effectiveness of the client's internal controls and perform fewer substantive procedures. This puts the auditor at risk of not detecting material misstatements in the financial statements. On the other hand, if the auditor assesses control risk too high, they may perform too many substantive procedures, resulting in an efficiency loss but not necessarily an increased risk of material misstatements not being detected. Therefore, the auditor is more concerned with the risk of assessing control risk too low.

Why Is the Auditor More Concerned with the Risk of Assessing