Which of the following risks expose the auditor to effectiveness losses?
A) Risk of assessing control risk too high, risk of incorrect acceptance
B) Risk of assessing control risk too low, risk of incorrect rejection
C) Risk of assessing control risk too high, risk of incorrect rejection
D) Risk of assessing control risk too low, risk of incorrect acceptance

Question

Quizplus · Accepted Answer

When the auditor assesses control risk too low, there is a risk of incorrect acceptance, which exposes the auditor to effectiveness losses. This is because the auditor may not detect material misstatements in the financial statements due to inadequate testing of controls.

Which of the Following Risks Expose the Auditor to Effectiveness