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What is the risk of assessing control risk too low?

The risk of assessing control risk too low is the risk that the assessed level of control risk, based on the sample results are lower than the actual risk based on the actual operating effectiveness of those controls. This will result in under-testing substantive procedures, and over-reliance on internal controls. This will affect the effectiveness of the audit detecting existing material misstatements.


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  • What is the risk of assessing control risk to high?

    The risk that the assessed level of control risk, based on the sample results, are higher than the actual risk based on the actual operating effectiveness of those controls. This will result in over-testing when it comes to testing substantive procedures. This will affect the efficiency of audit procedures.

  • What is control risk?

    Control risk is the risk that a material misstatement that could occur in a relevant assertion will not be prevented or detected on a timely basis by the company’s internal controls.