Risk Assessment and Response
Free CPA AUD (Auditing & Attestation) lesson in Assessing Risk and Developing a Planned Response. 39 min read, ~5,850 words.
Audit Risk = Inherent Risk x Control Risk x Detection Risk. Detection risk is the only component the auditor sets, as a consequence of the IR and CR assessments. Risk of material misstatement (RMM) = IR x CR. Assess it at both the financial statement level (pervasive) and the assertion...
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What this lesson covers
- Content
- Example 1
- Example 2
- Example 3
- Example 4
- Example 5
- Example 6
- Example 7
- Example 8
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- II.E1
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