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

Question

Quizplus · Accepted Answer

The risk that an auditor expresses an inappropriate audit opinion when a financial report is materially misstated is known as audit risk. Audit risk refers to the risk that an auditor may give an incorrect opinion which could be identified as a material misstatement by the user of the financial statements. Client business risk refers to the risk that the client will fail to achieve its objectives, engagement risk refers to the risk that exists in a particular client engagement, and detection risk refers to the risk that the auditor will not detect a material misstatement in the financial statements.

The Risk That an Auditor Expresses an Inappropriate Audit Opinion