Assume that the auditor sets audit risk at a low level, equal to 1%.

Assume that the auditor sets audit risk at a low level, equal to 1%.

Assume that the auditor sets audit risk at a low level, equal to 1%. What is the appropriate interpretation of this level of audit risk?

a. The auditor is willing to take only a 1% chance that audit procedures will not detect a material misstatement.

b. The auditor is 99% confident that the audit procedures will detect a material misstatement.

c. The auditor is willing to take only a 1% chance of expressing an audit opinion that the financial statements are fairly presented when they are materially misstated.

d. The auditor is 99% confident that the audit opinion is correct.

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