What is the model for the relationship of the four components of risk?
A) ADR = IR/(AAR x CR).
B) ADR = AAR/(IR x CR).
C) AAR = ADR x IR / CR.
D) IR = AAR/ADR x CR.

Question

Quizplus · Accepted Answer

The correct model for the relationship of the four components of risk is ADR = AAR/(IR x CR), where ADR is the Acceptable Detection Risk, AAR is the Acceptable Audit Risk, IR is the Inherent Risk, and CR is the Control Risk.

What Is the Model for the Relationship of the Four