Control risk is:
A) the risk that a client's system of internal controls will prevent or detect a material misstatement
B) the susceptibility of an assertion to a material assertion assuming there are no related controls
C) the risk that a client's system of internal controls will not prevent or detect a material misstatement
D) none of the above

Question

Quizplus · Accepted Answer

Control risk is the risk that the client's system of internal controls will not prevent or detect a material misstatement. Option A is describing the concept of internal control effectiveness, not control risk. Option B is referring to inherent risk, which is different from control risk. Option D is not the correct answer as options A to C are all related to the concept of control risk.

Control Risk Is