The auditor should consider audit risk when planning and performing an audit of financial statements. Audit risk should also be considered together in determining the nature, timing, and extent of auditing procedures and in evaluating the results of those procedures. The susceptibility of an assertion in an account or disclosure to a misstatement before consideration of any related controls Inherent risk The risk that a misstatement that could occur will not be prevented, or detected and corrected, on a timely basis by the entity’s internal control. Control risk The risk that the procedures performed by the auditor will not detect a misstatement that could be material. Detection risk c. Explain how these components are interrelated.
The auditor should consider audit risk when planning and performing an audit of financial statements. Audit risk should also be considered together in determining the nature, timing, and extent of auditing procedures and in evaluating the results of those procedures. The susceptibility of an assertion in an account or disclosure to a misstatement before consideration of any related controls Inherent risk The risk that a misstatement that could occur will not be prevented, or detected and corrected, on a timely basis by the entity’s internal control. Control risk The risk that the procedures performed by the auditor will not detect a misstatement that could be material. Detection risk c. Explain how these components are interrelated.
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter5: Professional Auditing Standards And The Audit Opinion Formulation Process
Section: Chapter Questions
Problem 24CYBK
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The auditor should consider audit risk when planning and performing an audit of financial statements. Audit risk should also be considered together in determining the nature, timing, and extent of
auditing procedures and in evaluating the results of those procedures.The susceptibility of an assertion in an account or disclosure to a misstatement before consideration of any related controls Inherent risk The risk that a misstatement that could occur will not be prevented, or detected and corrected, on a timely basis by the entity’s internal control. Control risk The risk that the procedures performed by the auditor will not detect a misstatement that could be material. Detection risk c. Explain how these components are interrelated.
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