Next explain each term in the model. (Select the four choices that apply.)

A.

Acceptable audit risk is a measure of how the auditor's willingness to allow that the financial statements may be materially misstated after the audit is completed and an unqualified opinion has been issued.

B.

Planned detection risk is a measure of the risk that audit evidence for a segment will fail to detect misstatements that could be material, should such misstatements exist.

C.

Control risk is a measure of the auditor's assessment of the risk that a material misstatement could occur in an assertion and not be prevented, or detected and corrected, on a timely basis by the client's internal controls.

D.

Planned detection risk is a measure of the auditor's assessment of the likelihood that there are material misstatements in a segment before considering the effectiveness of internal control.

E.

Acceptable audit risk is a measure of how willing the auditor is to accept that the financial statements may be materially misstated after the audit is completed and an unmodified opinion has been issued.

F.

Inherent risk is a measure of the auditor's assessment of the susceptibility of an assertion to material misstatement before considering the effectiveness of internal control.

G.

Control risk is a measure of the risk that audit evidence for a segment will fail to detect misstatements exceeding a tolerable amount, should such misstatements exist.

H.

Inherent risk is a measure of the auditor's assessment of the likelihood that misstatements exceeding a tolerable amount in a segment will not be prevented or detected by the client's internal controls.