Inherent fraud risk:The risk present before any controls are applied.
Residual fraud risk:The remaining risk after controls have been implemented.
Why D is Correct:
The goal of anti-fraud controls is to minimize residual risk to acceptable levels, recognizing that complete elimination of risk is unattainable.
Why Other Options are Incorrect:
A and C:It is impractical to completely eliminate inherent or residual fraud risks.
B:Residual risk should be lower than inherent risk, but controls aim for significant reduction
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