audit risk= inherent risk + control risk + detection Risk
OR
audit risk= inherent risk * control risk * detection risk??
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Audit risk related problem
Replies (3)
Plz reply.. im very confused... :(
Hi Mamta,
Audit Risk = Inherent Risk + Control Risk + Detection Risk
It is governed by SA 200 (new)
Inherent risk is susceptibility of financial statements to misstatement
Control risk is that these misstatements will not be detected by internal controls
Detection risk is that auditor may not detect these misstatements
All the above risks are different from each other and all of them CONSTITUTE audit risk.
Very nice and correct ans. given by mr.yogesh shah
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