An Inaccurate Form of the Audit Risk Model Would Show

question 39

Multiple Choice

An inaccurate form of the audit risk model would show that:

• A) detection risk can be determined from audit risk, inherent risk, and control risk.
• B) detection risk is inversely related to audit risk.
• C) increases in control risk will cause decreases in detection risk.
• D) audit risk is directly related to all other risks in the model.
• E) detection risk is inversely related to inherent risk.

---

Definitions:

Investment Return

The profit or loss on an investment over a specified period, represented as a percentage of the investment's initial cost.

Present Values

The worth of a future amount of money today, calculated by discounting future cash flows at a specific interest rate.

Annuities

Savings vehicles that deliver scheduled payouts, commonly utilized for building retirement reserves.

Compute

To calculate or determine by mathematical methods.