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What is control risk?

Beginner

Answer

Control risk is the risk that a material misstatement in an assertion won't be prevented, or detected and corrected, on a timely basis by the entity's internal controls. It depends on the design and operating effectiveness of controls. Weak controls mean high control risk, requiring more substantive audit work.
Real-world example A company with no segregation of duties in cash handling has high control risk over misappropriation.

Common follow-ups: How is control risk assessed? | What raises control risk?