Chapter 7, Problem 8TFQ

To determine

Introduction: Control risk is a risk that there is a possibility of material misstatement of financial statements due to poor internal check and control systems in a business. When the internal controls are weak, there are risks of unaccounted losses and hence, misstatement of profit and loss. However, none of the below factors affects the assessment of control risk at a higher level:

1) Lack of expertise to deal with changes in the industry

2) Existence of significant supply chain risks

3) The maturity stage of industry

4)Legal exposure

To choose:Whether the statement is true or false