Acceptable risk of overreliance is normally lower for a public company audit than a private company audit.

Question

Quizplus · Accepted Answer

The acceptable risk of overreliance is lower for a public company audit than a private company audit because public companies have a larger number of stakeholders who rely on the accuracy of the financial statements, and there is a higher level of regulatory oversight for public companies. Additionally, the potential consequences of financial misstatements at a public company, such as shareholder lawsuits and damage to the company's reputation, are typically more severe than those for a private company.

Acceptable Risk of Overreliance Is Normally Lower for a Public