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MW & Co., CPAs, is planning its audit procedures for its tests of the valuation of inventories of EC Manufacturing Co. The auditors on the
MW & Co., CPAs, is planning its audit procedures for its tests of the valuation of inventories of EC Manufacturing Co. The auditors on the engagement have assessed inherent risk and control risk for valuation of inventories at 80% and 40%, respectively. Calculate the appropriate level of detection risk for the audit of this assertion, given that the auditors wish to restrict audit risk for the assertion to 5%
Detection Risk =
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