The CPA firm of Quigley & Associates uses a qualitative approach to implementing the audit risk model. Audit risk is categorized using two terms: very low and low. The risk of material misstatement and detection risk are categorized using three terms: low, moderate, and high. Determine detection risk and TM level for each of the following hypothetical clients. Client No. Audit Risk Risk of Material Detection Risk TM level Misstatement Moderate High Low Moderate 2234 Low Very low Low Very low
The CPA firm of Quigley & Associates uses a qualitative approach to implementing the audit risk model. Audit risk is categorized using two terms: very low and low. The risk of material misstatement and detection risk are categorized using three terms: low, moderate, and high. Determine detection risk and TM level for each of the following hypothetical clients. Client No. Audit Risk Risk of Material Detection Risk TM level Misstatement Moderate High Low Moderate 2234 Low Very low Low Very low
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:The CPA firm of Quigley & Associates uses a qualitative approach to implementing the audit
risk model. Audit risk is categorized using two terms: very low and low. The risk of material
misstatement and detection risk are categorized using three terms: low, moderate, and high.
Determine detection risk and TM level for each of the following hypothetical clients.
Client No.
Risk of Material Detection Risk
Audit Risk
TM level
Misstatement
Moderate
High
Low
Moderate
1234
Low
Very low
Low
Very low
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