The audit risk model is presented as _______.
A)AR = f (IR * CR * DR)
B)AR = f (IR + CR + DR)
C)AR = f (IR + CR - DR)
D)AR = f (IR * CR) / DR

Question

Quizplus · Accepted Answer

The audit risk model is presented as AR = f (IR * CR * DR), where AR is audit risk, IR is inherent risk, CR is control risk, and DR is detection risk. This formula represents the relationship between the three types of risks and how they affect overall audit risk. Therefore, the best choice is A.

The Audit Risk Model Is Presented as _______