control risk

Definition

The probability that a misstatement exists in an assertion made pertaining to a financial statement due to the failure of internal control systems to detect. Prevent or correct it. As mandated by the International Standards of Auditing (ISA), it is the responsibility of management, not the auditor, to implement and manage an internal control system to prevent errors and fraud that could lead to misstatements.

Use control risk in a sentence

You need to accurately assess what the control risk will be and make sure that you don't extend past it.

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There was a control risk associated with it and I did not want to continue with it at all and wanted someone else to take control.

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New policies and procedures were put in place to manage the control risk associated with the operations and money movement groups.

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