Types of Audit Risks

Types of Audit Risks

There are basically three types of Audit Risks

1. Detection Risks
2. Control Risks
3. Inherent Risks

Detection Risks :- There is a risk that audit work done by the auditor for the detection of fraud and error would fail and would not be able to detect the misstatement in the reported financial statements.

Inherent Risk :- This means that despite all kind of control due to inherent limitation of audit. it is not possible to detect all misstatement in the financial statement.


Control Risks :- every organization put in place some control to detect and prevent the misstatement due to fraud and error. The risk that those control would not be able to detect the misstatement resulted from fraud or error.