risk of incorrect rejection/ risk of assessing CR too high

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    Topic
  • #1661843
    Parthamis
    Participant

    What is the difference between these two?

    It’s for AUD in a TBS related to sampling.

    Also, Risk of assessing control risk too low vs. Risk of incorrect acceptance… HUH?!

    Parthamis Prime

    AUD - 73, 75... and done.

    FAR - 80 (UNBELIEVABLE)

    BEC - 78

    REG - 81

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  • #1661854
    Bourne
    Participant

    Risk of assessing control risk too low – you're relying on the internal controls more than you should be. As a result, you're performing less tests. You'll complete an ineffective audit.

    Risk of incorrect acceptance – you're accepting a balance as being fairly stated, when in reality it is not. Wrong conclusion reached/ineffective audit.

    Risk of incorrect rejection – you're rejecting the balance as being fairly stated when in reality, it is fairly stated. Effective audit, but inefficient.

    Risk of assessing control risk too high – you're under-relying on internal controls, completing more tests, and conducting an audit inefficiently but effective.

    AUD- 82
    REG- 86
    FAR- 86
    BEC- 88
    #1661924
    Parthamis
    Participant

    so incorrect acceptance/rejection refers to the account balance… and risk of assessing CR too high/low refers to reliance of internal control.

    Thank You!

    Parthamis Prime

    AUD - 73, 75... and done.

    FAR - 80 (UNBELIEVABLE)

    BEC - 78

    REG - 81

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