Explanation Control risks arise due to possibility of failure of internal controls in a business .Due to weak internal controls, there is a probability of material misstatement .Hence, there can be situations of losses in the business; however that has been wrongly accounted as profit due to missing controls and checks. In below situations, an auditor will assess control risk at a higher level...

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN: 9781305080577

Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher: South-Western College Pub

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Question

Chapter 7, Problem 22MCQ

To determine

Introduction:

Control risk are the risks that there is a probability of material misstatement of financial statement due to failures of internal controls in a business. Due to control failures, a business has more risks to experience unaccounted losses. It means there is a misstatement of financial statements wherein these reflect a profit when actually there was a loss.

To choose:The option which is true regarding control risk

Expert Solution & Answer

Chapter 7 Solutions

Auditing: A Risk Based-Approach to Conducting a Quality Audit

Ch. 7 - Prob. 1TFQ Ch. 7 - Prob. 2TFQ Ch. 7 - Prob. 3TFQ Ch. 7 - Prob. 4TFQ Ch. 7 - Prob. 5TFQ Ch. 7 - Prob. 6TFQ Ch. 7 - Prob. 7TFQ Ch. 7 - Prob. 8TFQ Ch. 7 - Prob. 9TFQ Ch. 7 - Prob. 10TFQ

Ch. 7 - Prob. 11TFQ Ch. 7 - Prob. 12TFQ Ch. 7 - Prob. 13TFQ Ch. 7 - In terms of the timing of the risk response, the...Ch. 7 - Prob. 15MCQ Ch. 7 - Prob. 16MCQ Ch. 7 - Prob. 17MCQ Ch. 7 - Prob. 18MCQ Ch. 7 - Prob. 19MCQ Ch. 7 - Prob. 20MCQ Ch. 7 - Prob. 21MCQ Ch. 7 - Prob. 22MCQ Ch. 7 - Prob. 23MCQ Ch. 7 - Prob. 24MCQ Ch. 7 - Prob. 25MCQ Ch. 7 - Prob. 26MCQ Ch. 7 - Prob. 27MCQ Ch. 7 - Prob. 28MCQ Ch. 7 - Prob. 29RSCQ Ch. 7 - Prob. 30RSCQ Ch. 7 - Define the following terms: (a) performance...Ch. 7 - Prob. 32RSCQ Ch. 7 - Prob. 34RSCQ Ch. 7 - Prob. 35RSCQ Ch. 7 - Prob. 36RSCQ Ch. 7 - How does inherent risk relate to internal...Ch. 7 - Prob. 38RSCQ Ch. 7 - Prob. 39RSCQ Ch. 7 - Prob. 40RSCQ Ch. 7 - Prob. 43RSCQ Ch. 7 - Prob. 45RSCQ Ch. 7 - Prob. 46RSCQ Ch. 7 - Prob. 47RSCQ Ch. 7 - Prob. 48RSCQ Ch. 7 - Prob. 49RSCQ Ch. 7 - Prob. 52RSCQ Ch. 7 - Prob. 53RSCQ Ch. 7 - Prob. 54RSCQ Ch. 7 - Prob. 55RSCQ Ch. 7 - Prob. 56RSCQ Ch. 7 - Prob. 57RSCQ Ch. 7 - Prob. 58FF

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