The Auditors of Smith Electronics Wish to Limit the Audit

The auditors of Smith Electronics wish to limit the audit risk of material misstatement in the test of accounts receivable to 5 percent.They believe that inherent risk is 100%,there is a 40 percent risk that material misstatement could have bypassed the client's system of internal control,and a 50 percent risk that any existing material misstatement would not have been brought to light by the auditors' analytical procedures.What is the maximum risk of incorrect acceptance the auditors should specify in their substantive tests of details of accounts receivable?

A) 5 percent.
B) 10 percent.
C) 20 percent.
D) 25 percent.

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