When planning a financial statement audit, auditors must understand audit risk and its components. The audit firm evaluates the risk of material misstatement (RMM) by disaggregating (analyzing) RMM into its two components: inherent risk and control risk, then plans for its acceptable detection risk. Required: For each of the following illustration statements), scieet the component of nudit risic that is most directly illustrated (presented). The three components of audit risk may be used once, more than ones, or not at all. Components of Audit Risk are a. Control risk b. Inherent risk c. Detection risk 1- A client fails to discover employee fraud on a timely basis .. Control Risk because bank accounts are not reconciled monthly b. 2- Cash is more susceptible (casier) to theft than an inventory b. inherent Risk of laptops Detection Risk 3. Confirmation of accounts receivables used by an auditor fails to help the auditor find a material misstatement. ]+- Disbursements (payments) have occurred without proper approval S- There is inadequate segregation of duties. 6-A necessary substantive audit procedure is omitted. 7- Notes receivable are susceptible to material misstatement, assuming there are no related internal controls 8- Fast Technological developments in the market make a major product obsolete (o (out of customer in interest) - 9- The client is very close to having solvency problems because of Covid-19 conditions 10- XYZ Company, a client, lacks sufficient working capital to continue operations b