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) control risk.
B) acceptable audit risk.
C) inherent risk.
D) statistical risk.

Question

Quizplus · Accepted Answer

Inherent risk is the 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. Control risk is the risk that the client's internal control will not prevent or detect a material misstatement. Acceptable audit risk is the risk that the auditor is willing to accept in the form of presumably undetected misstatements. There is no such thing as statistical risk in auditing terminology.

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