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      Question

      The risk that an auditor may give an inappropriate

      opinion when financial statements are materially misstated is:
      A Inherent Risk Correct Answer Incorrect Answer
      B Control Risk Correct Answer Incorrect Answer
      C Detection Risk Correct Answer Incorrect Answer
      D Audit Risk Correct Answer Incorrect Answer

      Solution

      Audit Risk = Inherent Risk Γ— Control Risk Γ— Detection Risk. It's the risk that the auditor expresses an inappropriate opinion when financial statements are materially misstated.

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