Question

ABCD is an accounting practice situated in Durban. You, a newly graduated auditor from Mancosa joined the company in 2023. After a 6-month induction process, your manager, Kenneth, requested you perform an audit engagement on JVC Holdings. JVC Holdings acceptable risk is 4%, and the inherent and control risk is 80% and 100% respectively. Kenneth would like you to present the audit risk model, detail the three (3) elements of audit risk and calculate and interpret the detection risk results of JVC Holdings.