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Hello everyone. I want to discuss two key elements of audit risk and how they made perfect sense while studying them. So inherent risk is the risk of misstatement assuming no controls are in place, while control risk is the risk of misstatement if the controls dont work. These are the two elements of audit risk that the auditor doesnt control, but are very important.
What is Residual Risk? My Accounting Course 2017-10-10T04:04:14+00:00 Definition: Residual risk, also called inherent risk, is the balance of risk exposure after identifying and acting on all known threats. In other words, itâs the danger that there will be a loss causing threat that isnât identified and taken into consideration. What Does Residual Risk Mean? What is the definition of residual risk?