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I understand what makes inherent risk go up or down but in my practice questions the questions all relate to how control risk affects detection rest but never about how inherent risk affects detection risk. If inherent risk goes up does Detection risk go down or vice versa? if inherent risk goes up more substantive procedures are done which makes Detection risk go down?

Mario Marcel, CPA

FAR. Feb 2014 76
REG. Jan 2015 79 half way there!!
BEC. Feb 2015 79 thank you God!!
AUD. Apr 20, 2015 and will be done. Hold that thought 65, 7/14/15 85!
Ok where was I? Oh thats right now I'm Done!!!!!!!!!
Ethics 92!!

"You down wit SEC?, yeah you know me!!!"

Cali Candidate

All Becker Materials, Wiley Test Bank, Ninja audio, Ninja MCQ, Ninja Notes

[Anonymous]

Yes. Audit risk is the risk that an account and related assertion contains material misstatements (composed of IR and CR) and the risk that the auditor fail to detect them. (DR)

Hope this helps:

Audit risk = IR x CR x DR. If AR is .05 and CR or IR increases then DR which is the only one that you control has to decrease in order to hold AR at .05.

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Ok cool thanks cortes. I just wish i saw more questions emphasizing the relationship between IR and DR

Mario Marcel, CPA

FAR. Feb 2014 76
REG. Jan 2015 79 half way there!!
BEC. Feb 2015 79 thank you God!!
AUD. Apr 20, 2015 and will be done. Hold that thought 65, 7/14/15 85!
Ok where was I? Oh thats right now I'm Done!!!!!!!!!
Ethics 92!!

"You down wit SEC?, yeah you know me!!!"

Cali Candidate

All Becker Materials, Wiley Test Bank, Ninja audio, Ninja MCQ, Ninja Notes

[Author]

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