ICAEW ARF · Chapter 3 · Question 8 of 13
Which of the following describes control risk?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The risk that a misstatement that could be material will not be prevented, or detected and corrected, on a timely basis by the entity's internal control
Explanation
Control risk relates to the entity's own internal control failing to prevent or detect and correct a misstatement. The auditor's failure to detect misstatements is detection risk, and expressing an inappropriate opinion is audit risk overall. The susceptibility of an assertion before controls is inherent risk.
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