Steve and Janie are discussing audit sampling one day at lunch. Steve has spent the morning working with his supervisor and has learned about the risk of incorrect acceptance. Janie asks Steve how an auditor goes about determining the risk of incorrect acceptance. Which of the following represents Steve's MOST accurate reply to this question?

The risk of incorrect acceptance is calculated by the auditor using assessed levels of control and inherent risk.

The auditor uses the risk of incorrect acceptance to determine audit risk and is calculated by dividing inherent risk by control risk.

The risk of incorrect acceptance helps an auditor to determine control risk and has an inverse relationship with audit risk.

None of the choices is correct.