the risk that the auditor expresses an inappropriate audit opinion when the financial statements are materially misstated is called?

Candidates studying Paper F8, Audit and Assurance, are required under the syllabus to: ‘Explain the components of audit risk and explain the risks of material misstatement in the financial statements’.

the risk that the auditor expresses an inappropriate audit opinion when the financial statements are materially misstated is called?

This element of the syllabus has been examined in the last three sessions of Paper F8 – in June 2010, December 2010 and June 2011. However, the performance of candidates has on the whole been unsatisfactory. This article aims to identify the most common mistakes made by candidates as well as clarifying how audit risk questions should be tackled in order to maximise marks.