e the ving 17 OBJECTIVES 9-5. 9.0 risk, acceptable wents. In each of bent variables and pl. por determine from 2. The client's man Control risk ullellion risk Using the audit risk model, state the effect on control risk. inher- audit risk, and planned evidence for each of the following independent Cehe events a. through ).. circle one letter for each of the three indepen- planned evidence: I = increase, D = decrease, N = no effect, and = can- ne from the information provided. is management materially decreased long-term contractual debt: Acceptable audit risk IDNC Planned evidence IDNC ... changed from a privately held company to a publicly held company: IDNC Acceptable audit risk IDNC IDNC Planned evidence IDNC ditor decided to set assessed control risk at the maximum (it was previously trol risk Inherent risk IDNC IDNC ha h The client changed Control risk Inherent risk c. The auditor de Control risk essed below the maximum): IDNC Acceptable audit risk IDNC Inherent risk IDNC Planned evidence IDNC The client acquired a new subsidiary located in Italy: Control risk IDNC Acceptable audit risk IDNC Inherent risk IDNC Planned evidence IDNC The account balance increased materially from the preceding year without apparent reason: Control risk IDNC Acceptable audit risk IDNC Inherent risk IDNC Planned evidence IDNC . You determined through the planning phase that working capital, debt-to-equity ratio, and other indicators of financial condition improved during the past year: Control risk IDNC Acceptable audit risk IDNC Inherent risk IDNC Planned evidence IDNC 8. This is the second year of the engagement, and there were few misstatements found in the previous year's audit. The auditor also decided to increase reliance on internal control: IDNC ough its Web page during ss is not integrated with the sales staff print out customer order informa cceptable audit risk IDNC IDNC Control risk Planned evidence IDNC Inherent risk h. The client began selling products online to customers through its Web the year under audit. The online customer ordering process is not integrated company's accounting system. Client sales staff print out custome tion and enter that data into the sales accounting system: Control risk IDNC Acceptable audit risk IDNC Inherent risk IDNC Planned evidence IDNC i. There has been a change in several key management personnel. You belie management is somewhat lacking in personal integrity compared with the previo management. You believe it is still appropriate to do the audit: Control risk IDNC Acceptable audit risk IDNC Inherent risk IDNC Planned evidence IDNC j. In discussions with management, you conclude that management is planning to sell the business in the next few months. Because of the planned changes, several key accounting personnel quit several months ago for alternative employment. You also observe that the gross margin percent has significantly increased compared w that of the preceding year: Control risk IDNC Inherent risk IDNC Acceptable audit risk Planned evidence IDNC IDNC