Which of the Following Statements Regarding Inherent Risk Is Correct

Multiple Choice

Which of the following statements regarding inherent risk is correct?

A) Inherent risk is unaffected by the auditor's experience with client's organization.
B) Most auditors set a low inherent risk in the first year of an audit and increase it if experience shows that it was incorrect.
C) Most auditors set a high inherent risk in the first year of an audit and reduce it in subsequent years as they gain more knowledge about the company.
D) Inherent risk is dependent upon the strengths in client's internal control system.