The audit risk model can be used by the auditor as a multiplicative model.

Name: The audit risk model can be used by the auditor as a multiplicative model.
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Question

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The audit risk model is a multiplicative model that considers the risk of material misstatement (RMM), the risk of detection (RD), and the risk of auditor's assessment (RA) as three independent factors that affect audit risk. The model is expressed as AR = RMM x RD x RA, where AR is audit risk.

The Audit Risk Model Can Be Used by the Auditor