An auditor assesses control risk because it:

Question

Quizplus · Accepted Answer

Choice "D" is correct. The auditor uses the assessed level of control risk (together with the assessed level of inherent risk) to determine the assessed risk of material misstatement, which in turn affects the acceptable level of detection risk for financial statement assertions. Choice "A" is incorrect. The auditor assesses control risk after obtaining an understanding of internal control. Assessment is not required to obtain an understanding of the control environment or any of the other four components of internal control. Choice "B" is incorrect. Assessment of control risk is unrelated to assessments of materiality levels. Choice "C" is incorrect. Inherent risk is assessed independently of any consideration of relevant controls. Control risk does not affect inherent risk.

An Auditor Assesses Control Risk Because It