The following are descriptions representing different sampling risks associated with attributes and variables sampling. Indicate, using the correct letter, which term is most closely associated with the definition. Each term is associated with only one description.
1. The auditor’s sample indicates that the client’s control policies and procedures are not functioning effectively | Risk of incorrect acceptance | ____ |
2. The auditor’s substantive procedures reveal that the client’s account balance is not fairly stated | Risk of assessing control risk too high | ____ |
3. The auditor concludes that the account balance is fairly stated when, in fact, it is misstated | Risk of assessing control risk too low | ____ |
4. The client’s internal controls are not functioning effectively | Risk of incorrect rejection | ____ |
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