[smarti41]

Hello,

Can someone please advise on the difference between audit risk and incorrect acceptance?

Q: Auditor CPAs render an unmodified opinion on clients year end financials, but unbeknownst to the auditors, the financial statements are materially misstated due to a computer error that causes sales revenue for a particular product to be recorded twice.

A: Audit risk

I was under the impression the answer here is risk of incorrect acceptance.

The answer explanation states:

Audit risk is the risk that the auditor may unknowingly fail to modify appropriately the opinion on financial statements that are materially misstated. In this case, the auditors did not know that the sales were materially overstated and therefore failed to appropriately modify the opinion.

So how is this different from the risk of incorrect acceptance?

Thanks for the help.

[mskcle]

The reason it is not incorrect acceptance is because the question is not referring to the results of a sample being projected on the whole balance which would be what incorrect acceptance is. In this case, they do not refer to samples or sample results at all, it just mentions the event the auditors were unaware of which led to an inappropriate opinion which makes audit risk the correct answer

[Author]

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