By assessing control risk as high, an auditor has determined that their client's system of internal controls
A) is unlikely to be effective in mitigating inherent risks identified.
B) is very effective at preventing or detecting material misstatements.
C) is very strong.
D) will eliminate the possibility of material fraud or error.

Question

Quizplus · Accepted Answer

If an auditor assesses control risk as high, it means that they do not have faith in the client's internal controls to effectively mitigate identified inherent risks. Therefore, option A is the correct choice. Option B is the opposite of a high control risk assessment and is therefore incorrect. Option C is not necessarily true based on a high control risk assessment. Option D is also incorrect as no system of internal control can completely eliminate the possibility of material fraud or error.

By Assessing Control Risk as High, an Auditor Has Determined