Inherent Risk and Control Risk

question 19

Multiple Choice

Inherent risk and control risk

• A) are inversely related to each other.
• B) are inversely related to detection risk.
• C) are directly related to detection risk.
• D) are directly related to audit risk.

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Definitions:

Liability

The legal responsibility to settle a debt or fulfill an obligation, potentially involving payment for damages in legal cases.

Employer

An individual or organization that hires and pays individuals to perform services or work.

Escape

The act of breaking free from confinement or restraint, often used in the context of escaping from prison or custody.

Agent's Crime

Illegal acts committed by an individual (agent) acting on behalf of another party.