Risk of incorrect acceptance

The risk of incorrect acceptance is a situation in which the results of an audit sample support a conclusion that an account balance is correct, when this is not really the case. Instead, the account balance is materially incorrect. The outcome could be that the auditor conducting the test issues an incorrect opinion regarding a client's financial statements. The risk of incorrect acceptance can be reduced by increasing the size of the sample.

Related Courses

Guide to Audit Sampling
How to Conduct an Audit Engagement