Control risk
Control risk is the risk that a potentially material misstatement in an assertion will not be prevented, or detected and corrected on a timely basis, by the entity’s system of internal control. The auditor’s assessment reflects the planned approach and evidence about relevant controls.
Worked example
If unauthorised supplier changes are not independently reviewed, a fraudulent payment could pass through without timely detection.
Common mistake
The existence of a written control does not establish that it operated effectively throughout the relevant period.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AA | Direct | September 2026–June 2027 |