Assume you are a CPA working with an ABC audit firm. Explain how the risk of material misstatement should be assessed and what effect that assessment will have on detection risk for the following audit client:

ALLIA company is a fast-growing trucking company operating in the southeastern part of the West Bank. The company is publicly held, but Leo Mike and his sons control 55 percent of the stock. Leo Mike is chairman of the board and CEO. He personally makes all major decisions with little consultation with the board of directors. Most of the directors, however, are either members of the Leo family or long-standing friends. The board basically rubber-stamps Leo Mike's decisions.