Why Does the Risk of Incorrect Rejection Result in an Efficiency

question 77

Multiple Choice

Why does the risk of incorrect rejection result in an efficiency loss to the auditor?

• A)Additional time is necessary to propose adjustments to the client's account balances.
• B)The auditor typically expands the sample to examine additional components or transactions of the account balance.
• C)More detailed audit procedures are performed on sample items already examined by the auditor.
• D)The auditor typically extends the study of internal control to attempt to obtain a reduction in the level of risk of material misstatement.

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Definitions:

Potentially Useful

Describes something that has the capacity to be of benefit or service, possibly aiding in solving a problem or fulfilling a need.

Group Brainstorming

A collaborative idea generation process where members of a group freely share and develop creative solutions or thoughts.

Imagination-Based

Relating to, or characterized by, the creative ability of the mind to form images or concepts of external objects not present to the senses.

Relationship-Seeking Strategies

Plans of action that involve consciously making links between concepts or ideas that are not normally associated with each other.