The auditor concludes that the clients inherent risk is 40% and control risk is 60%....
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The auditor concludes that the clients inherent risk is 40% and control risk is 60%. The auditor decides to test controls in order to be able to rely on controls. The auditor plans to conduct year-end substantive audit procedures in order to achieve a detection risk of 30%. What is the probability that that auditor will discover a material misstatement during the year-end substantive audit procedures?
Answer = 1.68 [(.6 X .4) X 7]
Why?????
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