Control risk is the risk that:
A) an auditor expresses an inappropriate audit opinion when a financial report is materially misstated
B) an auditor's substantive procedures will not detect material misstatements
C) a client's system of internal controls will not prevent or detect a material misstatement
D) none of the above

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. Option A relates to the risk of expressing an inappropriate audit opinion due to material misstatements, which is audit risk. Option B relates to detection risk, which is the risk that substantive procedures will not detect material misstatements.

Control Risk Is the Risk That