Inherent risk is: a. the risk of a misstatement occurring irrespective of any internal controls put in place by management. b. the risk that the auditor's testing procedures will not detect a material misstatement. c. assessed as high when there are no internal controls tested or relied upon by the auditor. d. assessed as low when there are good internal controls in place. Choose the correct answer and explain why it is the correct answer

Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter3: Internal Control Over Financial Reporting: Responsibilities Of Management And The External Auditor
Section: Chapter Questions
Problem 40CYBK
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Inherent risk is: a. the risk of a misstatement occurring irrespective of any internal controls put in place by management. b. the risk that the auditor's testing procedures will not detect a material misstatement. c. assessed as high when there are no internal controls tested or relied upon by the auditor. d. assessed as low when there are good internal controls in place. Choose the correct answer and explain why it is the correct answer
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