Final answer:
The risk of incorrect rejection and the risk of under-reliance both relate to sampling risk.
Step-by-step explanation:
The risk of incorrect rejection and the risk of under-reliance relate to sampling risk. When auditors choose a sample of transactions or account balances to test for fairness, they understand that the sample may not perfectly represent the entire population. The risk that the auditors might reject a transaction or balance as incorrect (when it would have been deemed correct if the whole population were tested) is known as the risk of incorrect rejection, which is a Type I error. Conversely, under-reliance, or the risk of incorrect acceptance (a Type II error), occurs when auditors incorrectly assume that a sample is representative of the entire population when it is not. Both types of risks are forms of sampling risk that arise from the possibility that the sample is not representative of the whole.
These risks are associated with the possibility that an auditor's sample may not accurately represent the entire population, leading to Type I and Type II errors, respectively.