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EBK AUDITING & ASSURANCE SERVICES: A SY
11th Edition
ISBN: 9781260687668
Author: Jr
Publisher: MCGRAW-HILL LEARNING SOLN.(CC)
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Question
Chapter 4, Problem 4.15MCQ
To determine
Concept Introduction:
Audit risk is a risk that audit may provide an inappropriate opinion on the basis of his findings during the audit. There are some inherent risks and avoidable risk which result in an audit risk.
Audit risk has its three components; inherent risk, control risk, and detection risk.
To choose: The combination of two components of audit risk that is refereed by risk of material misstatement.
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Students have asked these similar questions
The risk of material misstatement is composed of which audit risk components?a. Inherent risk and control risk.b. Control risk and detection risk.c. Inherent risk and detection risk.d. Inherent risk, control risk, and detection risk.
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.
What are the components of the risk of material misstatement (RMM)? What are the components of the audit risk model?
Chapter 4 Solutions
EBK AUDITING & ASSURANCE SERVICES: A SY
Ch. 4 - Prob. 4.1RQCh. 4 - Prob. 4.2RQCh. 4 - Prob. 4.3RQCh. 4 - Prob. 4.4RQCh. 4 - Prob. 4.5RQCh. 4 - Prob. 4.6RQCh. 4 - Prob. 4.7RQCh. 4 - Prob. 4.8RQCh. 4 - Prob. 4.9RQCh. 4 - Prob. 4.10RQ
Ch. 4 - Prob. 4.11RQCh. 4 - Prob. 4.12RQCh. 4 - Prob. 4.13MCQCh. 4 - Prob. 4.14MCQCh. 4 - Prob. 4.15MCQCh. 4 - Prob. 4.16MCQCh. 4 - Prob. 4.17MCQCh. 4 - Prob. 4.18MCQCh. 4 - Prob. 4.19MCQCh. 4 - Prob. 4.20MCQCh. 4 - Prob. 4.21MCQCh. 4 - Prob. 4.22MCQCh. 4 - Prob. 4.23PCh. 4 - Prob. 4.24PCh. 4 - Prob. 4.25PCh. 4 - Prob. 4.26PCh. 4 - Prob. 4.27PCh. 4 - Prob. 4.28PCh. 4 - Prob. 4.29PCh. 4 - Prob. 4.30PCh. 4 - Prob. 4.31PCh. 4 - Prob. 4.32P
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Similar questions
- The 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_forwardThe combination of inherent risk and control risk constitutes : A. Occurence risk B. Audit risk C. Detection risk D. Combined riskarrow_forwardWhich of the following terms best describes the risk that audit procedures will fail to detect material misstatements? a. Control risk. b. Inherent risk. c. Detection risk. d. Audit risk.arrow_forward
- The combination of inherent risk and control risk refers to: * Detection risk Audit risk Risk of material misstatement Engagement risk None of the abovearrow_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_forwardWhich of the following risks does the auditor least control? a. inherent risk b. control risk c. detection risk d. all are equally controllablearrow_forward
- This term is synonymous with acceptable audit risk. O Audit assurance O Tolerable misstatement O Detection risk O Materialityarrow_forwardWhat is audit risk? Briefly explain how the concepts of audit risk and materiality are related.arrow_forwardInherent risk and control risk differ from detection risk in which of the following ways? A. Inherent risk and control risk are calculated by the client B. inherent risk and control risk exist independently of the audit. C. Inherent risk and control risk are controled by the auditor. D. Inherent risk and control risk exist as a result of the auditor's judgement about materiality.arrow_forward
- The likelihood that material misstatements may have entered the accounting system and notbeen detected and corrected by the client’s internal control is referred to asa. Inherent risk.b. Control risk.c. Detection risk.d. Risk of material misstatement.arrow_forwardAssuming a lack of internal control in a client's system, the risk of material misstatement is known as? O Inherent risk Client risk O Detection risk O Audit riskarrow_forwardthe susceptibility of an account balance or class of transactions to misstatements that could be material, individually or when aggregated with misstatements in other balances or classes, assuming that there were no related internal control is called : Select one: a. control risk b. audit risk c. detection risk d. inherent riskarrow_forward
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