Question: Write the expanded risk model. What risk is implied for test of detail risk when IR = 1.0, CR = 0.40, APR = 0.60, AR

Write the expanded risk model. What risk is implied for “test of detail risk” when IR = 1.0, CR = 0.40, APR = 0.60, AR = 0.048, tolerable misstatement = $10,000, and the estimated standard deviation in the population = $25?

Step by Step Solution

★★★★★

3.58 Rating (173 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Expanded risk model AR IR x CR x AP x TD ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

383-B-A-A-P (1323).docx

120 KBs Word File

Students Have Also Explored These Related Auditing Questions!

What is meant by the terms tolerable misstatement and tolerable rate of error? How do they relate to materiality?

What should be the relationship between tolerable misstatement in the audit of an account balance and the amount of monetary misstatement considered material to the overall financial statements?

1. Consider a two-ray channel with impulse response h(t) = 8(t) + 8(t 0.022s). Find the distance separating the transmitter and receiver, as well as and , assuming free-space path loss on each path...

answer questions 4,5,6 hello , the questions 4,5,6 are the questuons using the information i provided .. only write out whatever info is found . also question 6 to write out a memo stating a clear...

Assume that you are preparing to confirm accounts receivable at December 31, 2022, which is one month prior to the fiscal year-end of January 31, 2023. The book value of gross accounts receivable is...

AUDIT CASE: Your firm, ACTG 307 & Associates, is engaged to audit the financial statements of XYZ Corporation. It is a private manufacturing company that is considering going public in three to four...

Mini Audit Project Your firm, ACTG 307 & Associates, is engaged to audit the financial statements of XYZ Corporation. It is a private manufacturing company that is considering going public in three...

Alpine Cupcake Audit Case- Cash Module Question 4: You have concerns about the adequacy of the substantive audit work done by the engagement team. Review in detail the cash confirmation and bank...

Your firm, ACTG 307 & Associates, is engaged to audit the financial statements of XYZ Corporation. It is a private manufacturing company that is considering going public in three to four years. Your...

I only need answers to part 3 and 4, please. Mini Audit Project Your firm, ACTG 307 & Associates, is engaged to audit the financial statements of XYZ Corporation. It is a private manufacturing...

Penguin Corporation paid $16,200 for a 90% interest in Seagull Corporation on January 1, 2019, when Seagull stockholders' equity consisted of $10,000 Capital Stock and $3,000 of Retained Earnings....

A rm uses components A, B, and C to assemble a nal product F; see the bill of materials in Figure 2. Calculate the total inventory cost for the end item F during the eight weeks. Note that, for each...

What principle underlies the "bias - variance tradeoff" in machine learning? reducing the model's variance exclusively to produce consistent results, regardless of the dataset maximizing model...

Scope, time, cost, and quality are the four A. Facilitating functions B. * Core functions

Which of the following is an auditors objective related to the valuation assertion for the auditees PPE and intangible assets ? a. Obtain evidence that the auditee has legal rights to its patents. b....

SCI makes clothes under its own labels, and also makes clothes to order under the labels of several large retailers. The large retailers usually order goods to be manufactured and held by SCI until...

Grafite International Inc. (Grafite) is a manufacturer of various components used in the electricity distribution industry. It has factories across the country, and its customer base includes a...

The Reynolds Corporation buys from its suppliers on terms of 2/17, net 65. Reynolds has not been utilizing the discounts offered and has been taking 65 days to pay its bills. Mr. Duke, Reynolds...

Prospect Theory stipulates that an individual s perception of their wealth is I. Generally unreliable II . Often set between reference points between achieved results and current conditions III....

Consider two streams of cash flows, A and B . Stream A s first cash flow is $9,200 and is received three years from today. Future cash flows in Stream A grow by 3 percent in perpetuity. Stream B s...