(TCO H) Audit Risk

(TCO H) Audit Risk consists of inherent risk, control risk, and detection risk.
(a) Please completely define each of the above.
(b) Indicate whether each of the statements below is true or false and explain your position:
(1)  The risk that material misstatement will not be prevented or detected on a timely basis by internal controls can be reduced to zero by having effective controls in place.
(2)  Detection Risk is a function of the efficiency of an auditing procedure.
(3) Cash is more susceptible to theft than an inventory of coal because it has greater inherent risk?
(4)  The Inherent risk of the theft of an inventory of cellphones at a mall store is greater than the misappropriation of cash at a COSTCO Store?

be brief

preview of the answer..

Audit risk is a term used to refer to the probability that the auditor gives a wrong audit opinion or fails to discover fraud in cases where the financial records have been misstated (Healy & Palepu, 2012). The audit risk if the function of two factors. The control risk, the detection risk and the inherent risk.

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