What is audit risk?
A)The risk that an auditor expresses an inappropriate audit opinion when financial statements are materially misstated
B)The risk that is explicit or implied and made by management regarding the recognition, measurement, presentation and disclosure of items included in the financial statements and notes
C)The risk that a client's internal controls will not prevent or detect a material misstatement on a timely basis
D)The assessed risk of material misstatement that, in the auditor's judgment, requires special audit consideration

Question

Quizplus · Accepted Answer

Audit risk refers to the risk that the auditor expresses an inappropriate audit opinion when financial statements are materially misstated. It is the risk that the auditor may issue an unqualified opinion on the financial statements that contain material misstatements. In other words, audit risk is the risk that the auditor will fail to detect material misstatements in the financial statements, and therefore provide an inappropriate audit opinion.

What Is Audit Risk