What is control risk?
A)The risk that a client's internal controls will not prevent or detect a material misstatement on a timely basis.
B)The assessed risk of material misstatement that, in the auditor's judgment, requires special audit consideration
C)An audit risk assessment that involves the identification of accounts and related assertions most at risk of material misstatement
D)A risk that management's assertion, or claim, that recorded inventory exists

Question

Quizplus · Accepted Answer

Control risk is the risk that a client's internal controls will not prevent or detect a material misstatement on a timely basis. This means that even if a company has internal controls in place, there is still a risk that they may not be effective in preventing errors or fraud. The auditor assesses this risk when planning the audit and determines the extent of testing needed in order to reduce this risk to an acceptable level.

What Is Control Risk