When Testing Controls, Sampling Risk Is the Risk That the Auditor

question 11

Multiple Choice

When testing controls, sampling risk is the risk that the auditor

• A) concludes that their client's internal controls are ineffective when they are effective.
• B) concludes that their client's internal controls are effective when they are ineffective.
• C) both a and b
• D) none of the above

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Definitions:

Customer Death

A situation in which a business must address the death of a client, often involving the handling of accounts, services, or ongoing transactions.

Cashier's Check

A check guaranteed by a bank, drawn on the bank's own funds and signed by a cashier or teller.

Stolen Check

A check that has been taken unlawfully from its rightful owner, potentially leading to unauthorized transactions.

Bank Notification

A message or alert sent by a bank to inform its customers of specific account activities or changes.