What would most appropriately describe the risk of incorrect rejection in terms of substantive testing?
AThe auditor has rejected an item for sample which was material
BThe auditor concludes balance is materially correct when in actual fact it is not
CNone of the above
DThe auditor concludes that the balance is materially misstated when in actual fact it not
Correct answer
D. The auditor concludes that the balance is materially misstated when in actual fact it not
Explanation
The auditor concludes that the balance is materially misstated when in actual fact it not is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.