Question
State whether each of the following statements is correct or incorrect concerning audit risk and its components. Give a brief explanation as to why. A.
State whether each of the following statements is correct or incorrect concerning audit risk and its components. Give a brief explanation as to why.
A. The risk of material misstatement is composed of the three components of audit risk.
B Inherit Risk is the possibility of material misstatement before considering the clients' internal control.
C Less control risk means an increase in the risk material misstatement.
D Detection risk does not exist when no audit is performed.
E Rather then restrict detection risk through the performance of more substantive procedures, auditors assess it.
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