One form of the risk model is AAR = IR x CR x PDR AAR = Acceptable Audit Risk CR = Control risk IR = Inherent Risk I = Increase PDR Planned Detection Risk (note you are asked to evaluate planned evidence) D = Decrease N = No Effect C = Cannot determine Company changed from privately held to publicly held. Slowing sales have increased the potential for inventory obsolescence. Indicate the effect on acceptable audit risk: Increase Decrease No change Cannot determine One form of the risk model is AAR = IR x CR x PDR AAR = Acceptable Audit Risk CR = Control risk IR = Inherent Risk I = Increase N = No Effect PDR = Planned Detection Risk (note you are asked to evaluate planned evidence) D = Decrease C = Cannot determine In auditing inventory, you decide to decrease reliance on controls. You also note significant additional borrowings with inventory as collateral. Indicate the effect on control risk: Increase Decrease No change Cannot determine