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Governance, Risk, Audit & Privacy · Intermediate

Control Risk

Risk that a material error will not be prevented or detected in a timely manner by internal controls.

Definition

Control risk depends on the design and operating effectiveness of controls. Higher control risk requires auditors to perform more substantive testing. It is assessed through compliance testing.

Example

Manual journal entry review without sign-off evidence indicates high control risk.

Exam tip

Control risk is assessed, not controlled, by the auditor.

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