Auding the audit risk model as your framework (AR = IR x CR x DR), consider the following situations and decide on whether the auditor's conclusion is appropriate:

a) Reeds, PA has just completed an evaluation of internal controls of Pearson Inc. Everything went great so the control risks must be zero and no material errors could have passed through them.

b) Richards, PA has been working on the same audit of Farms Inc for the last 3 years. Everything has always gone smoothly, and no errors have ever been found. Therefore, there is no inherent risk.

c) Rocky, PA is on the audit team for Lava Inc. He isn't very interested in dealing with this client and decides to detail procedures of year end balances to bring detection risk to 0.02 or less. He gave no thought to inherent risks or internal controls.