Accounting Multiple Choice Question – 13 September 2025

Audit risk can be split into three components: inherent risk, control risk, and detection risk.

For each of the following examples, select the type of risk illustrated.

The organisation has several estimates in its financial statements.…..?

Select ONE answer:

1. Inherent
2. Control
3. Detection
4. No Risk

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct => The estimates present a risk at the individual account level where those estimates are found that could increase the susceptibility of the accounts to material fraud and error.
2. Not correct
3. Not correct
4. Not correct

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