A major limitation in the application of the audit risk model is:

Question

Quizplus · Accepted Answer

The audit risk model can be limited by the difficulty in accurately measuring the components of the model, such as inherent risk, control risk, and detection risk, which can make it challenging for auditors to correctly assess overall audit risk. While there may be some level of difficulty in understanding the impact of changing one factor in the model on others, this is not typically seen as a major limitation. Defining the terms of the model is also not typically seen as a major limitation, as the model is well-established and widely used in the auditing profession. The Auditing and Assurance Standards Board (AASB) has accepted and incorporated the audit risk model into its standards, so the failure of the AASB to accept it is not a limitation of the model itself.

A Major Limitation in the Application of the Audit Risk