Question: Consider the equation below that represents the audit risk models for two different accounts in an audit. A: .05 = .5 x .2 x .5

Consider the equation below that represents the audit risk models for two different accounts in an audit.

A: .05 = .5 x .2 x .5 B: .05 = .5 x .8 x .125 (1) Identify and define each term. Be complete and specific. (2) For which account (A or B) will the audit team have to perform a higher-level audit and why? (3) What steps can an auditor take to perform a higher-level audit?

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