When performing substantive procedures,auditors run the sampling risk(s)of:
A)Assessing control risk too high or too low.
B)Incorrect acceptance and incorrect rejection.
C)Assessing control risk too low only.
D)Incorrect acceptance only.

Question

Quizplus · Accepted Answer

Sampling risk in substantive procedures is the risk that the auditor's conclusion based on a sample is different from the conclusion that would be reached if the entire population were subjected to the same audit procedure. Incorrect acceptance occurs when the auditor concludes from the sample that a material misstatement does not exist when, in fact, it does. Incorrect rejection occurs when the auditor concludes from the sample that a material misstatement exists when, in fact, it does not. Therefore, both of these risks are present in substantive procedures.

When Performing Substantive Procedures,auditors Run the Sampling Risk(s)of