The measurement of the auditor's assessment of the susceptibility of an assertion to material misstatement, before considering the effectiveness of related internal controls is defined as
A) audit risk.
B) inherent risk.
C) sampling risk.
D) detection risk.

Question

Quizplus · Accepted Answer

Inherent risk is the risk of material misstatement of an assertion, irrespective of internal controls. It is the auditor's assessment of the susceptibility of an assertion to material misstatement before taking into account the strength or weakness of the entity's internal control structure.

The Measurement of the Auditor's Assessment of the Susceptibility of an Assertion