Why Is the Auditor More Concerned with Controlling the Exposure

question 100

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 incorrectly issuing an unmodified opinion on the client's financial statements.

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Definitions:

Plant Location

The geographical site chosen for situating industrial operations or manufacturing facilities, based on criteria like cost, resources, and logistics.

Modern Production Facilities

Industrial or manufacturing plants that utilize the latest technology, equipment, and processes to increase efficiency, productivity, and quality of products.

CAD

Computer-Aided Design, technology used by engineers, architects, and designers to create precision drawings or technical illustrations.

CAM

Computer-Aided Manufacturing, a technology that uses computer software and machinery to automate the manufacturing process, improving efficiency and precision.