The audit team decided to reduce planned reliance on internal controls based on the results of attributes sampling.However,the actual rate of deviation in the population is lower than the tolerable rate of deviation.Which type of risk and loss is the audit team exposed to?
A) Risk of assessing control risk too low; efficiency loss
B) Risk of assessing control risk too high; effectiveness loss
C) Risk of assessing control risk too low; effectiveness loss
D) Risk of assessing control risk too high; efficiency loss

Question

Quizplus · Accepted Answer

The audit team is exposed to the risk of assessing control risk too high, which leads to efficiency loss because they are performing more substantive testing than necessary, despite the actual deviation rate being lower than the tolerable rate.

The Audit Team Decided to Reduce Planned Reliance on Internal