Distinguish between inherent risk and control risk

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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1.     Distinguish between inherent risk and control risk

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Inherent risk: Inherent risk measures the auditor’s assessment of the susceptibility in a material misstatement, before considering the effectiveness of internal control measures.

 

Control risk: Control risk measures the auditor’s assessment of the risk when the material misstatement could occur in an assertion and would not be prevented or detected the client’s internal control on a timely basis.

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