LO $5-15-54.$ Audit risk should be considered when planning and

performing an audit of financial statements in

accordance with generally accepted auditing

standards.

a$.$ Define audit risk.

b$.$ Describe its components of inherent risk, control

risk, and detection risk.

c$.$ Explain the interrelationship among these

components.

d$.$ Which $($if any$)$ of these components is completely a

function of the sufficiency of the evidence gathered

by the auditors' procedures? Explain your answer.

e$.$ Comment on the following: "Since cash is often less

than $1$ percent of total assets, inherent and control

risk for that account must be low. Accordingly,

detection risk should be established at a high level."

$($AICPA$,$ adapted$)$