Question 3

If the auditor establishes that no more than 5% Audit Risk can be tolerated on an audit and inherent risk is set at 100% and control risk has been reduced to 40% what level of detection risk is the auditor willing to accept?

I.	12.5%
II.	5%
III.	2%
IV.	10%

Question 4

In the above instance is the auditor is only willing to accept a 20% detection risk and inherent risk is set at 100%, the auditor will need to validate internal controls to reduce control risk to what %?

I.	10%
II.	50%
III.	25%
IV.	5%