Control risk is:
A) the susceptibility of an assertion to a misstatement that could be material assuming there are no related controls.
B) the risk that a client's system of internal controls will not prevent or detect a material misstatement.
C) the risk that the auditor's testing procedures will not be effective in detecting a material misstatement.\
D) the risk that fraud has occurred.

Question

Quizplus · Accepted Answer

Control risk is the risk that a client's system of internal controls will not prevent or detect a material misstatement. This means that even if there are effective controls, there is still a risk that they may fail to prevent or detect a material misstatement, leading to control risk. Option A refers to inherent risk, Option C refers to detection risk, and Option D refers to fraud risk.

Control Risk Is