III. APPLYING THE AUDIT RISK MODEL ARM] [ 25 pts 1. When trying to use the ARM, the audit team needs to consider Audit Risk [AR] at various stages in the audit. , What is Audit Risk? ii. How is the target level of AR determined? iii. Provide your judgment of what a reasonable quantitative level would be for the target level of AR. iv. Explain why it is reasonable'. vi. Near the end of the audit, an assessment of 'actual' AR would be estimated. What evidence would be available to make such an estimate? vii. Near the end of the audit, an assessment of 'actual' AR would be estimated. What should the audit team do if: a. the estimate of 'actual' AR evidence is greater than the target level'? b. the estimate of 'actual' AR evidence is less than the 'target level