The auditor set acceptable audit risk at 5%,inherent risk at 100%,and control risk at 50%,and determined a detection risk of 10%.If control risk had been 80%,detection risk would be about
A)16%.
B)10%.
C)6%.
D)5%.

Question

Quizplus · Accepted Answer

Detection risk is calculated using the formula: Detection Risk = Acceptable Audit Risk / (Inherent Risk x Control Risk). If control risk increases to 80%, the detection risk would be 5% / (100% x 80%) = 6.25%, which is approximately 6%.

The Auditor Set Acceptable Audit Risk at 5%,inherent Risk at 100%,and