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Inherent Risk & Control Risk

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Risk is the _____ that of loss or injury.

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1. The natural probability of an error in any process or activity is _____.

2. The risk that a control will fail to prevent an error that can lead to a material misstatement is _____ risk.

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About This Quiz & Worksheet

Use the quiz and worksheet to gauge your understanding of control risk and inherent risk. For the quiz, you need to know about what both of these terms mean.

Quiz & Worksheet Goals

You'll be quizzed on:

  • The natural probability of an error in an activity or process
  • Definition of risk
  • Difference between control risk and inherent risk

Skills Practiced

  • Information recall - access the knowledge you have gained about control risks identified by auditing firms by the Public Company Accounting Oversight Board (PCAOB)
  • Knowledge application - use your knowledge to answer questions about the different types of risk
  • Distinguishing differences - compare and contrast main topics, such as control risk and inherent risk, in a real-life situation

Additional Learning

If you would like to review more, use the lesson called Inherent Risk & Control Risk. You can study more topics about:

  • How risk is identified in business
  • Types of risk
  • Auditor deficiencies cited by PCAOB
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