Risk of incorrect rejection

The risk of incorrect rejection arises when a sample indicates that there is a risk of material misstatement when this is not actually the case. An auditor encountering this issue will expand the sample size or engage in other testing, though doing so reduces the efficiency of the audit work. This risk is a particular concern when the cost or difficulty of obtaining additional audit evidence is high.

Related Courses

Guide to Audit Sampling
How to Conduct an Audit Engagement