While Performing a Substantive Test of Details During an Audit

question 3

Multiple Choice

While performing a substantive test of details during an audit, the auditor determined that the sample results supported the conclusion that the recorded account balance was materially misstated. It was, in fact, not materially misstated. Such a situation illustrates the risk of

• A) Incorrect rejection.
• B) Incorrect acceptance.
• C) Assessing control risk too high.
• D) Assessing control risk too low.

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Definitions:

Demand Curves

A graphical representation that shows the relationship between the price of a good and the quantity demanded by consumers.

World Price

The worldwide market price of a good or service, affected by the balance of global demand and supply.

Nontariff Barrier

Measures other than tariffs that countries use to control the amount of trade across their borders, including quotas, embargoes, sanctions, and other restrictions.

Import

The act of bringing goods or services into a country from abroad for sale.