Non-sampling risk, and more specifically the risk of assessing control risk too low (risk of overreliance), cannot be eliminated, but it can be controlled.

Q: Outline the weaknesses of sensitivity analysis

A: Sensitivity analysis uses in capital budgeting for measuring the risk in project. It helps in…

Q: What determines the acceptable level of Detection Risk?

A: Detection Risk:   It is a chance that an auditor will fail to identify any material misstatement…

Q: Which of the following would not result in exposure to nonsampling risk?a. Measuring the…

A: Sampling: Sampling allows an individual to obtain information about the population of interest in a…

Q: ctiveness of te e risk of incorred

A: The right answer is option b .The risk of rejection

Q: For both tests of controls and substantive tests of details, non-sampling risk can be reduced by…

A: Solution Concept Sampling risk               Sampling refers to the examination of the sample from…

Q: Which of the following is not a category of risk response strategies? A. Acceptance. B.…

A: Risk mean the situations or circumstances which can lead to unfavourable or potential losses to the…

Q: What is the criticism for using SMB and HML as risk factors?

A: The Fama and French Three-Factor Model (or Fama French Model for short) is an asset pricing model…

Q: What happens when Control Risk is below the maximum level?

A:

Q: Statistical sampling cannot be used to test all control activities. TRUE OR FALSE? WHY?

A: Solution : Concept Statistical sampling               In an audit two methods of sampling can be…

Q: Define control risk and detection risk. What is the difference between control risk and detection…

A: Auditing:   In auditing, auditors verify the correctness and fair presentation of financial…

Q: How does Sampling Risk compare to Non-Sampling Risk?

A: Risk:   It is a probability of the financial statements being materially incorrect even though the…

Q: Which one of the following is the main problem with using non-probability sampling technique? a. The…

A: Nonprobability sampling is a technique where the samples are selected without the random selection…

Q: What should occur when a low level of Detection Risk is acceptable?

A: Detection risk is the risk that procedures performed to reduce audit risk will not detect a material…

Q: What do we mean by fundamental risk, and why may such risk allow behavioral biases to persist for…

A: Answer: Meaning: Fundamental risk is nothing but the loss arising out of situation which affects a…

Q: why is it important to identify weaknesses in key risk indicator's?

A: Risk is defined as future uncertainty, which is a probability event for the organization. Because…

Q: Which one of the following is the main problem with using non-probability sampling technique? a. The…

A: Sampling is the process of choosing selections from a population.

Q: There is no need to perform substantive tests procedures if the control risk is determined to be…

A: Auditing means the independent checking of company operation by outsider. Auditor is a qualified and…

Q: When is the timing of substantive procedures most flexible? O detection risk is assessed as low O…

A: Substantive procedure refers to a process performed by the auditor in order to detect the material…

Q: How are the sufficiency and appropriateness of evidence related to detection risk?

A: Audit Evidence:   The pieces of evidence provided by the audit team to prove their opinion with…

Q: What is the relationship between Evidence and Detection Risk?

A: Detection risk is the risk that an auditor will not find a material misstatement in a client's…

Q: Why is it important to be able to quantify risk?

A: Risk is the chance that an outcome of an investment's actual gain will differ from an expected…