Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. explain how internal control work done by auditors

Explain how internal control work done by auditors impacts the audit risk equation. Does control risk...

90.2K

Verified Solution

Question

Accounting

Explain how internal control work done by auditors impacts theaudit risk equation. Does control risk change if the auditors areproviding an opinion over internal controls? How is detection riskimpacted?

Answer & Explanation Solved by verified expert
4.0 Ratings (492 Votes)
Definition Audit Risk is the risk that an auditor expresses an inappropriate opinion on the financial statements Explanation Audit risk is the risk that an auditor issues an incorrect opinion on the financial statements Examples of inappropriate audit opinions include the following Issuing an unqualified audit report where a qualification is reasonably justified Issuing a qualified audit opinion where no qualification is necessary Failing to emphasize a significant matter in the audit report Providing an opinion on financial statements where no such opinion may be reasonably given due to a significant limitation of scope in the performance of the audit Model Audit Risk Inherent Risk x Control Risk x Detection Risk Audit risk may be considered as the product of the various risks which may be encountered in the performance of the audit In order to keep the overall audit risk of engagements below acceptable limit the auditor must assess the level of risk pertaining to each component of audit risk Components Explanation of the 3 elements of audit risk is as follows Inherent Risk Inherent Risk is the risk of a material misstatement in the financial statements arising due to error    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

s BOOKLET 1 In a mixture of sample of H atoms and He ions electrons...

Physics
Q

a buffer solution is prepared by mixing 100cm3 aqueous NH3 0.1mol dm-3 with 100cm3 NH4Cl mol...

Chemistry
Q

You receive an inheritance of a thirty-year annuity, which pays 1 at the end of the...

Finance
Q

The discharge through a rectangular channel 4.4 m wide is 16 m3/s. The Manning’s coefficient n...

Civil Engineering
Q

Write a one to two page paper about Nutrition in Early Childhood Identify the most common...

Psychology
Q

Question 5 8 34 points What is the correct adjacency matrix for the graph shown...

Algebra
Q

Students should write a full report to compare between applying the periodic inventory system and...

Accounting
Q

Which of the following is not considered in computing the taxpayer's amount at-risk with respect...

Accounting
Q

the month, the molding at a packaging. At the beginning of molding, department has 2,500...

Accounting
Q

Wainut Company has forecast sales for the next three months as follows: July 4,500 units,...

Accounting
Q

frank and benji's fantastic food, inc. is a grocery store organized as a C Corporation....

Accounting
Q

please help me solve! Swifty Furniture Company started construction of...

Accounting