Why Is the Auditor More Concerned with Controlling the Exposure

question 77

Multiple Choice

Why is the auditor more concerned with controlling the exposure to the risk of incorrect acceptance than with the risk of incorrect rejection?

• A) Only the risk of incorrect acceptance results in an incorrect decision by the auditor.
• B) The risk of incorrect rejection is not related to the auditor's substantive procedures.
• C) The risk of incorrect rejection can be controlled by performing substantive procedures during the interim period.
• D) The risk of incorrect acceptance may ultimately result in the auditor's incorrectly issuing an unqualified opinion on the client's financial statements.

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Definitions:

Neoclassic Economist

A school of thought in economics that focuses on the determination of goods, outputs, and income distributions in markets through supply and demand.

Sugary Treats

Sweet food items, often high in sugar content, considered indulgent or pleasurable to eat.

Rational Decision

A decision-making process based on logical reasoning and analysis of available information to achieve the most desirable outcome.

Behavioral Economists

Economists who study the effects of psychological, cognitive, emotional, cultural, and social factors on the economic decisions of individuals and institutions.