alleryStart learning →Which risk is the risk of a misstatement arising from the nature of the business or transaction itself?
ADetection risk
BControl risk
CSampling risk
DInherent risk
Answer & Solution
Correct answer: D. Inherent risk
Inherent risk exists because of the nature of the business or transaction, before any controls are considered.
Keep practising Risk Assessment and Internal Control
Browse all Risk Assessment and Internal Control questions for CA Final, or explore more Auditing topics.
Related questions
Which is correct about auditors and internal control?The COSO risk assessment component involves what?A payables system matches order, receipt and invoice before paying. Which objective?Maintaining documentation to substantiate transactions is which control activity?Why did the IASB decline a uniform numeric materiality threshold?Materiality is reassessed at the conclusion of the audit before the report is issued. WhatWhat is the purpose of setting performance materiality?Which expression gives audit risk in the audit risk model?