Which of the Following Is Not True with Respect to the Risk

question 86

Multiple Choice

Which of the following is not true with respect to the risk of incorrect rejection?

• A)Incorrect rejection occurs when the auditor concludes that the account balance is not fairly stated.
• B)The risk of incorrect rejection has an inverse relationship with sample size.
• C)The risk of incorrect rejection exposes the auditor to an efficiency loss.
• D)Incorrect rejection occurs when the true (but unknown)account balance is materially misstated.

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Definitions:

Stock

Shares of ownership in a company, representing a claim on the company's assets and earnings.

Primary Inventory Management

Refers to the basic approaches and strategies businesses use to control their goods, materials, and products to ensure availability while minimizing costs.

Distribution Center

A specialized building designed for storing and sorting products to facilitate their distribution to retailers, wholesalers, or directly to consumers.

Best-seller

A product or book that has achieved significant sales figures compared to others in its category.