$$LO $414243$

$427$ When planning a financial statement audit$$a CPA must understand audit risk and its components$$The firm of Pack $\backslash$Peck evaluates the risk of material misstatement$$RMM$$by disaggregating RMM into its two components$$inherent risk and control risk$$ Required$$

For each illustration$$select the component of audit risk that is most directly illustrated$$The components of audit risk may be used once$$more than once$$or not at all$$

Components of Audit Risk$$

a$$Control risk

b$$Detection risk

c$$Inherent risk