Which of the Following Statements Is Incorrect

question 28

Multiple Choice

Which of the following statements is incorrect?

• A) When detection risk is set as high, an auditor will require a high level of confidence that the transactions and accounts are not materially misstated.
• B) An auditor may decide to stratify the population before selecting a sample from it.
• C) An auditor will use professional judgment to determine the tolerable error and required level of confidence.
• D) An auditor will use professional judgment when considering what would be considered an error within the population tested.

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Definitions:

Act of Court

A formal decision, order, or judgment handed down by a court of law.

Operation of Law

Changes in legal rights or status that occur automatically due to established legal rules, without the need for action by the parties involved.

Limited Liability

A legal structure for businesses where owners' personal financial liability is restricted to the amount they have invested in the company.

Certificate of Limited Partnership

A legal document filed with a state government to establish the existence of a limited partnership.