Describe how an auditor is able to achieve a given level of audit risk through different combinations
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Describe how an auditor is able to achieve a given level of audit risk through different combinations of tests of controls and substantive tests. Consider the soccer/football analogy provided in Figure 10-7.
Figure 10-7
Transcribed Image Text:
Audit Risk: The likelihood an error (shot) will end up in the financial statements (goal net) Striker Will he kick it? Inherent Risk: The likelihood a client (striker) generates an error (shot) The "Wall" Will they stop it? Control Risk: The likelihood an error (shot) will get past controls (the "Wall") Bend It Like Beckham? Goalie Will he stop it? Detection Risk: The likelihood an error (shot) will get past the auditor (goalie) Goal
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Related Book For
Auditing Assurance And Risk
ISBN: 9780324313185
3rd Edition
Authors: W. Robert Knechel, Steve Salterio, Brian Ballou
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