Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN: 9781305080577
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: South-Western College Pub
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Question
Chapter 7, Problem 17MCQ
To determine
Introduction: The directional relationships between the concepts of inherent risk, control risk, audit risk, and detection risk.
To choose:The option which best defines the relationship between inherent risk and audit risks.
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Students have asked these similar questions
The combination of inherent risk and control risk constitutes :
A.
Occurence risk
B.
Audit risk
C.
Detection risk
D.
Combined risk
Which of the following risks does the auditor least control? a. inherent risk b. control risk c. detection risk d. all are equally controllable
The audit risk model consists of: AR = IR x R x DR. The detection risk is the dependent variable. What is the acceptable level ofdetection risk if the assessed level of inherent risk is HIGH and the control risk is MEDIUM?
a. Higher
b. Lower
c. Lowest
d. Medium
Chapter 7 Solutions
Auditing: A Risk Based-Approach to Conducting a Quality Audit
Ch. 7 - Prob. 1TFQCh. 7 - Prob. 2TFQCh. 7 - Prob. 3TFQCh. 7 - Prob. 4TFQCh. 7 - Prob. 5TFQCh. 7 - Prob. 6TFQCh. 7 - Prob. 7TFQCh. 7 - Prob. 8TFQCh. 7 - Prob. 9TFQCh. 7 - Prob. 10TFQ
Ch. 7 - Prob. 11TFQCh. 7 - Prob. 12TFQCh. 7 - Prob. 13TFQCh. 7 - In terms of the timing of the risk response, the...Ch. 7 - Prob. 15MCQCh. 7 - Prob. 16MCQCh. 7 - Prob. 17MCQCh. 7 - Prob. 18MCQCh. 7 - Prob. 19MCQCh. 7 - Prob. 20MCQCh. 7 - Prob. 21MCQCh. 7 - Prob. 22MCQCh. 7 - Prob. 23MCQCh. 7 - Prob. 24MCQCh. 7 - Prob. 25MCQCh. 7 - Prob. 26MCQCh. 7 - Prob. 27MCQCh. 7 - Prob. 28MCQCh. 7 - Prob. 29RSCQCh. 7 - Prob. 30RSCQCh. 7 - Define the following terms: (a) performance...Ch. 7 - Prob. 32RSCQCh. 7 - Prob. 34RSCQCh. 7 - Prob. 35RSCQCh. 7 - Prob. 36RSCQCh. 7 - How does inherent risk relate to internal...Ch. 7 - Prob. 38RSCQCh. 7 - Prob. 39RSCQCh. 7 - Prob. 40RSCQCh. 7 - Prob. 43RSCQCh. 7 - Prob. 45RSCQCh. 7 - Prob. 46RSCQCh. 7 - Prob. 47RSCQCh. 7 - Prob. 48RSCQCh. 7 - Prob. 49RSCQCh. 7 - Prob. 52RSCQCh. 7 - Prob. 53RSCQCh. 7 - Prob. 54RSCQCh. 7 - Prob. 55RSCQCh. 7 - Prob. 56RSCQCh. 7 - Prob. 57RSCQCh. 7 - Prob. 58FF
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Similar questions
- Which of the following statements is correct regarding detection risk and the audit risk model? OA. The two components of detection risk are test of details risk and inherent risk. B. Detection risk is equal to risk of material misstatement divided by audit risk. OC. There is an inverse relationship between the risk of material misstatement and detection risk. OD. There is a direct relationship between control risk and detection risk.arrow_forwardThe audit risk model consists of: AR = IR x CR x DR. The detection risk is the dependent variable. What is the acceptable level of detection risk if the assessed level of inherent risk is HIGH and the control risk is MEDIUM? Group of answer choices a.Lower b.Medium c.Lowest d.Higherarrow_forwardIn Auditing, which aspect is riskier, Completeness, or Existence?arrow_forward
- Which of the following is not a category of risk response strategies? A. Acceptance. B. Reduction. C. Avoidance. D. Compliance.arrow_forwardThis term is synonymous with acceptable audit risk. O Audit assurance O Tolerable misstatement O Detection risk O Materialityarrow_forwardThe risk of material misstatement is O inherent risk * detection risk. O audit risk * inherent risk. O inherent risk * control risk. O control risk * detection risk.arrow_forward
- Hedging is used to deal with three areas of risk exposure. Which are those risks? Name them.arrow_forwardAn audit can have significant effect on A. Financial risk B. Business risk C. Information risk D. Solvency riskarrow_forwardDefine the audit risk model and explain each term in the model.Also describe which two factors of the model when combined reflect the risk of materialmisstatements.arrow_forward
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