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      Question

      The risk that the auditor expresses an inappropriate

      audit opinion when the financial statements are materially misstated is known as:
      A Control Risk. Correct Answer Incorrect Answer
      B Inherent Risk. Correct Answer Incorrect Answer
      C Detection Risk. Correct Answer Incorrect Answer
      D Audit Risk. Correct Answer Incorrect Answer
      E Business Risk. Correct Answer Incorrect Answer

      Solution

      Audit Risk is the risk that the auditor expresses an inappropriate audit opinion when the financial statements are materially misstated. It is a function of the risks of material misstatement (Inherent and Control Risk) and Detection Risk

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