Inherent risk and control risk differ from detection risk in that inherent risk and control risk are:
A)elements of audit risk whereas detection risk is not.
B)changed at the auditor's discretion whereas detection risk is not.
C)considered at the individual account-balance level whereas detection risk is not.
D)functions of the client and its environment whereas detection risk is not.

Question

Quizplus · Accepted Answer

Inherent risk and control risk are related to the client's environment and the nature of the client's business, which are not under the control of the auditor. Detection risk, on the other hand, is the risk that the auditor fails to detect a material misstatement in the financial statements, which can be managed by the auditor through the nature, timing, and extent of auditing procedures.

Inherent Risk and Control Risk Differ from Detection Risk in That