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:

Property Taxes

Taxes levied by local government on real property based on its value, used to fund public services.

Current Dollars

The value of money expressed in terms of the purchasing power at the time of reporting, not adjusted for inflation.

Discount

A reduction from the usual cost of something, often applied to promote sales or incentivize early payment.

Investment

Committing financial assets with the objective of receiving income or profit in return.