Distinguish Between Inherent Risk and Control Risk

question 70

Essay

Distinguish between inherent risk and control risk.How do internal controls and detection risk fit in?

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Definitions:

Postbox Rule

A legal principle that states an offer is considered accepted once the acceptance is sent by the offeree, even if it has not yet been received by the offeror.

Letter Of Revocation

A written document formally cancelling or withdrawing an offer or contract before it has been accepted or become binding.

Letter Of Acceptance

A document confirming the acceptance of an offer, thereby creating a binding contract.

Legal Liabilities

Obligations under law arising from actions or omissions that may result in the requirement to pay damages or penalties.