Audit Risk Flashcards
1
Q
Risk of Material Misstatement
A
-exist independently of the financial statement audit
2
Q
Inherent Risk
A
3
Q
Control Risk
A
Control risk is the risk that a material misstatement that could occur in a relevant assertion will not be prevented of detected on a timely basis by the entity’s internal control.
4
Q
Inherent Risk & Control Risk
A
-exist independently of the audit and cannot be changed. However the auditor can change his or her assessment of these risks.
5
Q
Detection Risk
A
- CPA controls (NET)
- Auditor misses the mistake (error/fraud) and gives wrong opinion
6
Q
Factual misstatement
A
- is a misstatement about which there is no doubt.
7
Q
Assertion Level Risk
A
“COVER U”
