The risk that an auditor expresses an inappropriate audit opinion when the financial statements are materially misstated is known as:
A) engagement risk.
B) audit risk.
C) client business risk.
D) detection risk.

Question

Quizplus · Accepted Answer

This risk is known as audit risk, which is the risk of issuing an inappropriate audit opinion when the financial statements are materially misstated. Engagement risk refers to the risk of association with a client, client business risk refers to the risk that the client's business may fail, and detection risk refers to the risk that the auditor's procedures will not detect a material misstatement.

The Risk That an Auditor Expresses an Inappropriate Audit Opinion