Audit Risk

Question 1

Inherent Risk

Answer 1

Stems from the nature of the business, high volume cash/international

Question 2

Control Risk

Answer 2

Caused when internal controls don’t exist, are poorly designed, or are not operating effectively

Question 3

Detection Risk

Answer 3

Weak audit procedures or too small of a sample (Auditor can impact it)

Question 4

Answering Audit Risk

Answer 4

Overstatement, Understatement, Misstatement