The risk that an error that could occur in an audit area and could be material,individually or in combination with other errors,will not be prevented or detected and corrected on a timely basis by the internal control system is:
A)Inherent risk
B)Control risk
C)Detection risk
D)Incontrollable risk

Question

Quizplus · Accepted Answer

Control risk is the risk that a material misstatement could occur in the financial statements due to a weakness in the internal control system, which may fail to prevent or detect the error in a timely manner. Therefore, the best choice is B) Control risk. Inherent risk refers to the risk of material misstatement in the absence of any internal control system, and detection risk is the risk that the auditor may not be able to detect a material misstatement even if it exists. Incontrollable risk is not a commonly used term in auditing.

The Risk That an Error That Could Occur in an Audit