.Using the Audit Risk Model,answer the Following Questions

question 34

Essay

.Using the audit risk model,answer the following questions.
Required:
A)What is the risk of incorrect acceptance for Jack and for Jill?
B)Based on your answer in part (A),which auditor will have to collect the most evidence? Explain your reasoning.
C)What effect does differing assessments of control risk have on the sample size of accounts receivable? Explain.

• A)What is the risk of incorrect acceptance for Jack and for Jill?
• B)Based on your answer in part (A),which auditor will have to collect the most evidence? Explain your reasoning.
• C)What effect does differing assessments of control risk have on the sample size of accounts receivable? Explain.

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Definitions:

Cash Flow Estimate

An assessment of the amount of money expected to flow in and out of a business over a specific period.

Marginally Profitable

Describes a business or investment that generates a slight profit above its break-even point.

Capital Gain

The profit earned from the sale of an asset when the selling price exceeds its purchase price.

Book Value

The net asset value of a company, calculated as total assets minus intangible assets (patents, goodwill) and liabilities.