Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 185

Where should internal auditors focus their attention when identifying and assessing key risks during the planning stage of an assurance engagement?

Answer options

• A. Sampling risk
• B. Audit risk
• C. Residual risk
• D. Inherent risk

Correct answer: D

Explanation

The correct answer is D, as inherent risk refers to the susceptibility of an assertion to a material misstatement before considering any related controls. While audit risk (B) is the overall risk of a material misstatement, residual risk (C) pertains to risks remaining after controls are implemented, and sampling risk (A) deals with the risk of incorrect conclusions based on sample data.