Certified Information Systems Auditor (CISA) — Question 516

Which of the following BEST describes an audit risk?

Answer options

• A. The financial report may contain undetected material errors.
• B. Employees have been misappropriating funds.
• C. The company is being sued for false accusations.
• D. Key employees have not taken vacation for 2 years.

Correct answer: A

Explanation

Audit risk refers to the possibility that the financial statements may have material misstatements that are not detected by the auditor. Option A correctly identifies this risk as it focuses on undetected errors in financial reporting. The other options describe situations that may be related to fraud or employee behavior but do not directly define audit risk.