The Risk the Auditor Is Willing to Take of Accepting

question 48

Multiple Choice

The risk the auditor is willing to take of accepting a balance as correct when the true misstatement in the balance under audit is greater than the tolerable misstatement is

• A) the upper bound.
• B) the tolerable risk.
• C) the acceptable risk of incorrect acceptance.
• D) the lower bound.

---

Definitions:

Market Economies

Economic systems where supply and demand from consumers drive the production, allocation, and distribution of resources.

Privatisation

The selling of state‐owned enterprises into private ownership.

State-Owned Enterprises

Organizations that are owned and operated by the government and play a role in the delivery of public services or the production of goods.

Private Ownership

Ownership of assets by individuals or corporations rather than by the state or public entities.