Acceptable risk of incorrect rejection affects auditors' action only when they conclude that a population is:
A) fairly stated.
B) acceptable.
C) materially misstated.
D) acceptable after certain adjustments.

Question

Quizplus · Accepted Answer

The acceptable risk of incorrect rejection affects auditors' action only when they conclude that a population is materially misstated. This means that the auditors have identified a significant error or misstatement in the financial statements or supporting documentation. In this situation, the auditors may increase their sample size or change their audit procedures to lower the risk of a Type II error (incorrect acceptance) and uncover any additional material misstatements.

Acceptable Risk of Incorrect Rejection Affects Auditors' Action Only When