When Performing the Substantive Tests on an Account Balance,the Auditor

question 43

Multiple Choice

When performing the substantive tests on an account balance,the auditor is concerned about two aspects of sampling-based decision errors: (1) the risk of incorrect rejection (RIR) and (2) the risk of incorrect acceptance (RIA) .Which of the following is true about RIR and RIA?

• A)RIR is of greater concern to the auditor than the RIA.
• B)RIA is of greater concern to the auditor than the RIR.
• C)RIA and the RIR are of equal importance to the auditor.
• D)Neither the RIR nor the RIA need be considered by the auditor.

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Definitions:

Health Care

The maintenance or improvement of health via the prevention, diagnosis, treatment, recovery, or cure of disease, illness, injury, and other physical and mental impairments in people.

Current Liability

A company's debts or obligations that are due to be paid to creditors within one year.

Note Payable

An obligation in the form of a written promissory note requiring the borrower to repay the lender a specific sum of money on demand or at a predetermined date.

Interest Payable

This is the amount of interest expense that has accumulated but not yet been paid by a company.