Question: One form of the risk model is AAR = I R C R P D R AAR = Acceptable Audit Risk C R = Control

One form of the risk model is AAR =IRCRPDR
AAR= Acceptable Audit Risk CR= Control risk
IR,= Inherent Risk PDR= Planned Detection Risk
I = Increase D= Decrease
N=No Effect C= Cannot determine
In auditing inventory, you decide to increase reliance on controls. You also note significant additional borrowings with inventory as collateral. Indicate the effect on control risk:
Cannot determine
Increase
Decrease
No change
One form of the risk model is AAR =IRCRPDR AAR= Acceptable

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