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Use the Audit Risk Model to Plan Your Testwork for the BCS

question 119

Essay

Use the audit risk model to plan your testwork for the BCS audit.Assume that AR = .05.a.Inherent Risk was assessed at .3 and control risk was assessed at .5.Calculate DR from this information.b.What evidence should the auditor gather evidence to support the inherent risk and control risk assessment?
c.If the auditor determines that control risk is .7 instead of .5,what impact will this change in control risk have on detection risk? Calculate the new detection risk.In this situation,will the auditor perform more or less substantive testwork than when the control risk was assessed at .5?
d.If the auditor decreases the control risk from .5 to .3,will they do more or less internal control testing? More or less substantive testing?


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