when planning a nnancial statement audit, a CPA must understand audit fisk and its components. I he nim or Pack o 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