Professional Documents
Culture Documents
Chapter 9
Compare combined
Step
estimate with judgment
5
about materiality
2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 9-6
Learning Objective 2
IR = Inherent risk
CR = Control risk
D D I
Control risk
D = Direct relationship; I = Inverse relationship
2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 9 - 31
Relationship of Factors Influencing
Risks to Risks and Risks to
Planned Evidence
Auditors can change the audit
to respond to risks
Tolerable
misstatement
D = Direct relationship; I = Inverse relationship
2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 9 - 39
Audit Risk Model for Planning
AcAR = IR CR AcDR
IR = Inherent risk
CR = Control risk
D Inherent
Acceptable Achieved risk
Compare
audit audit
risk risk
D Control
risk
Substantive D Achieved
audit detection
evidence risk
D = Direct relationship
I = Inverse relationship I
2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 9 - 41
Revising Risks and Evidence