CISA Information System Auditing Process Practice Question
An IS auditor is assessing the risk of material misstatement in a financial system. The auditor determines that inherent risk is high, control risk is moderate, and detection risk is low. What is the overall audit risk?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Low
Audit risk is determined by inherent risk, control risk, and detection risk. The standard audit risk model is: Audit Risk = Inherent Risk × Control Risk × Detection Risk. With inherent risk high, control risk moderate, and detection risk low, the product is low (e.g., High × Moderate × Low = Low). This indicates a low overall audit risk because the auditor plans to perform sufficient substantive procedures to compensate for the high inherent and moderate control risks.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Low
Why this is correct
Correct. Low audit risk results from the combination of high inherent risk, moderate control risk, and low detection risk.
- ✗
Moderate
Why it's wrong here
Incorrect. Moderate audit risk would result if detection risk were moderate, but here it is low, reducing the overall risk.
- ✗
High
Why it's wrong here
Incorrect. High audit risk would require high inherent, high control, and high detection risk. Low detection risk reduces the overall risk.
- ✗
Cannot be determined
Why it's wrong here
Incorrect. Audit risk can be determined using the standard risk model when all three components are known.
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JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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