When Discussing Control Risk (CR)and the Audit Risk Model, Which

question 43

Multiple Choice

When discussing control risk (CR) and the audit risk model, which one of the following statements is NOT true?

• A) The relationship between CR and detection risk is inverse.
• B) The relationship between CR and evidence is direct.
• C) CR is a measure of the auditor's assessment of the likelihood that errors will not be prevented or detected by the client's internal control.
• D) If the auditor concludes that internal control is completely ineffective to prevent or detect errors, he or she would assign a 0% to CR.

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Definitions:

Chain of Command

The chain of command is a system of authority and responsibility in an organization, where orders are passed from the top levels down to the subordinate levels.

Providing Control

The act of offering or managing the ability to direct or influence others or the outcome of events.

Communication Purpose

The reason or intent behind conveying a message or information to someone else.

Providing Insight

Offering deeper understanding or analysis that sheds light on a subject.