Question

Statistics indicates concern for both alpha and beta errors. In audit terms this might be described as being concerned about the risk of concluding that the financial statements are misrepresented when they are actually fair, AND the risk of saying that the financial statements are fair when they are not. However, audit risk is defined as the risk of issuing an unqualified audit report when the financial statements are misstated or ICFR is not effective. Why doesn’t audit risk include the opposite error as well?



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  • CreatedJanuary 21, 2015
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