The Single Audit Act distinguishes between major and nonmajor federal programs. One factor that distinguishes a major from a nonmajor program is inherent risk. Which of the following is NOT a characteristic of "inherent risk"?

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Inherent risk refers to the susceptibility of an assertion about a transaction, account balance, or disclosure to a misstatement that could be material, either individually or when aggregated with other misstatements, before consideration of any related controls. It is related to the nature of the business or transaction itself, without considering the entity's internal controls or the potential for oversight by external agencies. Thus, lack of oversight by federal agencies is not a characteristic of inherent risk; it is more related to external audit or monitoring processes.

The Single Audit Act Distinguishes Between Major and Nonmajor Federal