Question: What is the directional relationship between the risks of material
What is the directional relationship between the risks of material misstatement (inherent and control risk) and both audit risk and detection risk? In other words, if the risks of material misstatement increase or decrease, how are audit risk and detection risk affected?
Answer to relevant QuestionsDistinguish between a controls reliance audit and a substantive audit. Which approach should an auditor consider to be most effective?MULTIPLE-CHOICE QUESTIONS1. Refer to Exhibit. Assume a 5% risk of overreliance, a tolerable deviation rate of 8%, a sample size of 100, and that the number of deviations is 5. What is the upper limit of the possible ...Practice calculating the sample size and the number of expected errors in attributes sampling by using the tables in Exhibit and the following combinations ofinputs:The following information relates to a nonstatistical sample used for a price test of inventory:a. What is the best estimate of the total misstatement?b. Are these results acceptable, assuming tolerable misstatement is ...Respond to the ethical judgments required based on the following scenarios.Scenario 1. Assume you have collected a sample using MUS and that you have evaluated that sample to calculate a total estimated misstatement of ...
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