Inherent risk (accounting)

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Inherent risk, in a financial audit, measures the auditor's assessment of the likelihood that there are material misstatements due to error or fraud in segment before considering the effectiveness of internal control. If the auditor concludes that a high likelihood exist, the auditor will conclude that inherent risk is high.

See also[edit]

• Inherent risk
• Control risk

References[edit]

• Jackson & Stent, 2010: Auditing Notes for South African Students (7th Edition)