Match the following risks to their definition:
Business Risk of Client
Information Risk
Audit Risk
Control Risk
Detection Risk
Inherent Risk
Sampling Risk
The risk that a material misstatement that could
occur in an account will not be prevented or detected on a
timely basis by internal controls.
The risk that the information used by investors,
creditors and others to assess business risk is not accurate.
The risk assumed by investors or creditors that is
associated with the company's survival and profitability.
The risk that the auditors may unknowingly fail
to appropriately modify their opinion on financial
statements that are materially misstated.
The risk that the auditor's sample is not
representative of the entire population.
The risk that the auditors' procedures will lead
them to conclude that a financial statement assertion is
not materially misstated when in fact such misstatement
does exist.
The risk of material misstatement of a financial
statement assertion, assuming there were no related
controls.
Short Answer
Provide an example of 4 of the following; risk avoidance,
risk reduction, risk transfer, risk sharing and risk
acceptance.
Describe the five components of internal control.