Answer:
a.
Explanation:
Inherent risk refers to the possibility that a material misstatement will occur within the reporting company's accounting information system. In other words it is a risk that exists of there being an error or omitted data in the financial statement of a company/organization, that usually occurred due to a high degree of judgment being required.
Answer:
Inherent risk refers to:
a. The possibility that a material misstatement will occur within the reporting company's accounting information system
Explanation:
In a financial statement, there are complex transactions requiring judgement expertise and still they represent inherent risk, raised by a mistake or omission, due to a factor other than a failure of internal control, or the possibility that a material misstatement that has occurred will not be detected on a timely basis by the company's control system ; the possibility that a material misstatement that has occurred will not be caught be the independent auditor's testing or the possibility that a material misstatement will occur in the financial statements.
