State whether each of the following statements is correct or incorrect concerning audit risk and its components—inherent risk, control risk, and detection risk.
a. The risk of material misstatement is composed of the three components of audit risk.
b. Inherent risk is the possibility of material misstatement before considering the client’s internal control.
c. Less control risk means an increase in the risk of material misstatement.
d. Detection risk does not exist when no audit is performed.
e. Rather than restrict detection risk through the performance of more substantive procedures, auditors assess it.
f. Absent any other changes, an increase in the risk of material misstatement results in an increase in audit risk.
g. Audit risk refers to the possibility that the auditors may unknowingly fail to appropriately modify their opinion on financial statements that are materially or immaterially misstated.
h. Both inherent risk and control risk exist independently of the audit of financial statements.