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:

Bargain

An agreement between two or more parties to exchange goods or services for mutually perceived value, often involving negotiation to reach favorable terms.

That's-not-all Technique

A persuasion method where before finalizing a deal, an additional offer is made to make the proposal seem more attractive.

Reciprocal Concessions

A negotiation strategy where each party makes compromises to reach an agreement, often strengthening the relationship through mutual sacrifice.

That's-not-all Technique

A sales strategy where additional items or discounts are offered to make a deal look more appealing without giving the buyer time to refuse the initial offer.