An auditor discovers that an account balance believed not to be materially misstated based on an audit sample was materially misstated based on the total population of the account balance.This is an example of which of the following types of sampling risks?
A)Incorrect rejection.
B)Incorrect acceptance.
C)Overreliance.
D)Underreliance.

Question

Quizplus · Accepted Answer

This is an example of incorrect acceptance, which occurs when the auditor concludes that a population is not materially misstated when, in fact, it is. The auditor incorrectly accepted the account balance as not materially misstated based on the audit sample, leading to the material misstatement being missed.

An Auditor Discovers That an Account Balance Believed Not to Be