Engagement risk is:
A)the risk of issuing an incorrect auditor's opinion.
B)the auditor's risk of loss from events arising in connection with the financial report audited and reported upon.
C)the overall risk of material misstatements.
D)the risk of entity financial failure.

Question

Quizplus · Accepted Answer

Engagement risk refers to the risk the auditor faces of suffering a loss or damage from events associated with the financial statements they have audited and reported on. This could include damage to their professional reputation, legal liability, or financial loss, but it is not directly related to the risk of issuing an incorrect opinion, the risk of material misstatement, or the risk of the entity's financial failure.

Engagement Risk Is