Benis & Co., a CPA firm, has adopted the following specific percentages for the indicated qualitative levels of risk: Minimum 30% Moderate 50% Maximum 100% Benis & Co.'s partners have decided to use audit risk levels of 5 percent or 10 percent, depending on the circumstances of the specific engagement. The partners have also decided to use a separate assessment of inherent risk.

Required: 

a. A staff auditor on one of Benis & Co.'s audit engagements is planning the confirmation of accounts receivable. Assume the staff auditor has assessed control risk and other procedures risk as moderate and inherent risk as maximum. What is the allowable detection risk for receivables confirmation to achieve an audit risk of 10 percent?

b. If the staff auditor made the same decisions as in a, but assessed inherent risk as moderate rather than maximum, what is the allowable detection risk? c What basis would the staff auditor need for assessing inherent risk as moderate rather than maximum? d What types of considerations would influence whether an audit risk of 5 percent or 10 percent was appropriate?