Which of the following statements is false?
A)Inherent risk is inversely related to the level of control risk.
B)Inherent risk is directly related to the amount of evidence required in account testing.
C)Inherent risk is the susceptibility of the financial statements to material misstatement,assuming no internal controls.
D)Inherent risk and control risk are assessed by the auditor and controlled by the client.

Question

Quizplus · Accepted Answer

Inherent risk is not inversely related to the level of control risk. Inherent risk is the susceptibility of an assertion to a misstatement due to error or fraud before considering any related controls, while control risk is the risk that a misstatement that could occur in an assertion and that could be material, either individually or when aggregated with other misstatements, will not be prevented, or detected and corrected, on a timely basis by the entity's internal control. These risks are assessed independently by the auditor.

Which of the Following Statements Is False