When the auditor concludes that a control is functioning properly when,in fact,it is not,the auditor has committed the:
A)Risk of underreliance.
B)Risk of overreliance.
C)Risk of incorrect acceptance.
D)Risk of incorrect rejection.

Question

Quizplus · Accepted Answer

When the auditor concludes that a control is functioning properly when it is not, it means that he has placed too much reliance on the control, and this is referred to as the risk of overreliance. This increases the risk of the auditor failing to detect material misstatements in the financial statements.

When the Auditor Concludes That a Control Is Functioning Properly