An increase in the effectiveness of internal controls would have the greatest effect on
A) reducing control risk.
B) reducing detection risk.
C) reducing inherent risk.
D) reducing audit risk.

Question

Quizplus · Accepted Answer

Internal controls are put in place to reduce the risk of material misstatements in the financial statements. An increase in the effectiveness of internal controls would directly reduce the risk that a material misstatement would go undetected or uncorrected, thus lowering the likelihood of control risk.

An Increase in the Effectiveness of Internal Controls Would Have