A measure of the auditor's assessment of the likelihood that there are material misstatements in an account before considering the effectiveness of the client's internal control is called:
A)control risk.
B)acceptable audit risk.
C)statistical risk.
D)inherent risk.

Question

Quizplus · Accepted Answer

Inherent risk is the risk of material misstatement without considering the effectiveness of internal control. Control risk refers to the risk that a material misstatement will not be prevented or detected and corrected by the entity's internal control. Acceptable audit risk is the risk that the auditor is willing to accept that the financial statements may be materially misstated even though the audit is conducted in accordance with auditing standards. Statistical risk is not a commonly used term in auditing.

A Measure of the Auditor's Assessment of the Likelihood That