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The risk of a material misstatement includes inherent risk and sampling risk.

a)True
b)False

1 Answer

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Final answer:

The risk of a material misstatement does not include sampling risk but includes inherent risk and control risk.

Step-by-step explanation:

False. The risk of a material misstatement includes inherent risk and control risk, not sampling risk. Sampling risk is the risk that the sample selected for testing does not accurately reflect the population being tested. Inherent risk refers to the risk of material misstatement existing in the financial statements, while control risk refers to the risk of material misstatement not being prevented or detected by internal controls.

User ChristianFigueroa
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