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

question 103

Multiple Choice

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

• A)This risk provides the auditor with an efficiency loss.
• B)This risk results in the auditor making an incorrect conclusion about the client's account balance or class of transactions.
• C)This risk occurs when the sample results suggest that the account balance is fairly stated.
• D)This risk is controlled by the auditor in determining sample size under monetary unit sampling (MUS).

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Definitions:

Voting Shares

Shares of a company that grant the shareholder the right to vote on company matters.

Patent

An exclusive right granted for an invention, which allows the patent owner to exclude others from making, using, or selling the invention for a certain period of time.

Non-controlling Interest

Equity interest in a subsidiary not held by the parent company, representing a share of the subsidiary’s net assets and profits.

Voting Shares

Shares that give the shareholder the right to vote on company matters, such as elections for the board of directors; instrumental in controlling the company.