A measure of the auditor's assessment of the likelihood that there are material misstatements in an account before considering the effectiveness of the client's internal control is called:
A) acceptable audit risk.
B) inherent risk.
C) statistical risk.
D) control risk.

Question

Quizplus · Accepted Answer

Inherent risk is the risk of a material misstatement in an account before considering the effectiveness of internal control. Acceptable audit risk pertains to the level of audit risk that the auditor is willing to accept. Control risk is the risk that a material misstatement will not be prevented or detected on a timely basis by internal control. Statistical risk is not a term commonly used in auditing.

A Measure of the Auditor's Assessment of the Likelihood That