Control Risk
Accounting glossary · Understand, connect, apply
Control risk is the risk that an entity’s internal controls will fail to prevent or detect a potentially material misstatement on a timely basis.
Example
The same employee can create a supplier and approve its payment, allowing fictitious payments to go unnoticed.
Remember the difference
The existence of a written procedure gives limited information about whether staff carry it out effectively.
Browse the accounting glossary · PCAOB reference: AS 1101
Prepared with AI assistance. Examples are fictional and simplified for learning.
Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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