Question

Which of the following is an example of an "Inherent Risk" factor?

Q: Answer-Which of the following is an example of an 'Inherent Risk' factor?

Inherent risk is the susceptibility of an assertion to a misstatement that could be material, before consideration of any related controls. Complexity is a classic inherent risk factor.

A Failure of the auditor to select a relevant audit procedure.

B Lack of management oversight regarding reconciliations.

C The complexity of transactions which might be susceptible to misstatement.

D An error in the computerized accounting system.

E The auditor’s reliance on a small sample size.

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Which of the following is an example of an "Inherent Risk" factor?

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