Why Is the Auditor More Concerned with the Risk of Assessing

question 56

Multiple Choice

Why is the auditor more concerned with the risk of assessing control risk too low rather than the risk of assessing control risk too high?

• A) The risk of assessing control risk too high is not a type of sampling risk.
• B) The risk of assessing control risk too low exposes the auditor to an efficiency loss.
• C) The risk of assessing control risk too low may result in the auditor's failing to perform sufficient substantive procedures.
• D) The risk of assessing control risk too low cannot be measured by the auditor during the sampling process.

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Definitions:

Policy Conditions

Specific provisions, rules, or requirements set forth in an insurance policy that must be met for the policy to be valid and for the insurer to perform its obligation.

Binder Agreement

A temporary or preliminary agreement that outlines the terms of a more formal agreement to be made later.

Temporary Insurance Coverage

Short-term insurance protection provided to the insured during a specific period or while waiting for permanent insurance to become effective.

Insurance Coverage

The amount and type of protection provided under an insurance policy against financial loss or liability.