For each of the following situations, explain how the risk of material misstatement should be assessed and what effect that assessment will have on detection risk.

Johnson, Inc. is a fast-growing trucking company operating in the southeastern part of the United States. The company is publicly held, but Ivan Johnson and his sons control 55 percent of the stock. Ivan Johnson 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 Johnston family or long-standing friends. The board basically rubber-stamps Ivan Johnson's decisions.