Sampling risk for tests of controls is when
A) audit risk is reduced.
B) an auditor concludes that the audit client's internal control system is effective when it is not.
C) an auditor concludes that material misstatements exist when they do not.
D) audit risk is increased.

Question

Quizplus · Accepted Answer

Sampling risk for tests of controls specifically refers to the possibility that an auditor might incorrectly assess the effectiveness of internal controls. When an auditor erroneously concludes that a client's internal control system is effective when it is not, they have encountered sampling risk in the context of tests of controls.

Sampling Risk for Tests of Controls Is When