Question

The two (2) types of sampling risks auditors face include the risk of incorrect acceptance and the risk of incorrect rejection. What do each of these mean and how will each impact the audit process and the audit results? Which do you consider the more important risk?

Answer 1

Answers : There is two types of risk invowed with tweing the auelitors to sumpre the test. It invokes the risk of incorrect rejection and the risk of incorrect acceptance. The Hisic of incorrect accepternet és a much higher risk, so let's think more about et. Because if the cuelitor incorrectly accepts the ceccount balance, the corony cuelitor cem vote for them. The risk of incorrect acceptance eies with a serious risk auelitor who shows pattem support. It has been estimated that there is nothing comes physically corong when it to the amount excerms, The risk of incorrect rejection is what it implies, However, it can be concluded that the camount Jesteed is gon-mafericel even whent it is not difficulty of selecting items

in more samples is less, then the maximum feeling the risk of incorrect jejection. when it comes to financial matters, auditorshewe to deal with clifferent types of risk and risk feletors associated with the cuelit. In the case of auelit, there are two known about cuelit risk and business risk. In the case of the acudits the risk is tupi- cally estimated as being likely to misrepresent financial accounting Anel the second is the number of risk factors in the case of ccuelit-comelandit The business risk is adversely ceffected by the cuelitor's cuelits or any complaints or criticisms mucle about the client's cuelited finanyal accounts. Some of the key elements of the business threeet aire litigation, approval by pubic or private entities. Regardless of the risk associated with the cluelit process, each type heesą

direct impact on the cuelito when taking samples, the consequences of zisk can be particularly aggrauating the risk of an cudit. This shows that if an cueliton knows matericel misstatement related to financicel scrutiny, they will not be able to get it through an explanation,