Why Is the Auditor More Concerned with the Risk of Overreliance

question 90

Multiple Choice

Why is the auditor more concerned with the risk of overreliance than the risk of underreliance?

• A)The risk of underreliance is not a type of sampling risk.
• B)The risk of overreliance exposes the auditor to an efficiency loss.
• C)The risk of overreliance may result in the auditor failing to perform sufficient substantive procedures.
• D)The risk of overreliance cannot be controlled by the auditor during the sampling process.

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Definitions:

Unconformity

The contact zone between unlike strata groups, marking a historical period of erosive activity or absence of sediment deposition.

Permeable Units

Layers of earth materials, such as sand or gravel, that allow water to pass through easily.

Impermeable Units

Impermeable units refer to layers of rock or sediment that water cannot easily pass through, significantly affecting the flow of groundwater and the storage of hydrocarbons.

Salt Dome

A type of geological formation where a mass of salt has risen upward through the overlying rock, often creating traps for oil and gas.