How are components of the audit risk model rearranged to solve for detection risk?
A)DR = AR ÷ RMM
B)DR = AR + RMM
C)DR = AR - RMM
D)DR = AR x RMM

Question

Quizplus · Accepted Answer

Detection risk can be solved for by rearranging the audit risk model formula: AR = IR x CR x DR. To solve for DR, we can rearrange the formula as DR = AR ÷ (IR x CR). Given that RMM = IR x CR, we can substitute RMM for (IR x CR) in the formula and get DR = AR ÷ RMM. Therefore, the correct answer is A.

How Are Components of the Audit Risk Model Rearranged to Solve