Fo er nT en ne 5 = Karin Traila Audit Risk " 3H AKM /10 Assignment pn & Mov 4022 + Explain the depition of Audit Risk | 2. What is acceptable audit risk ? 3. What are the factors hat Watered micstatement because of error or fraud. Audit Rick _Teduced acceptable low level based on piopessional Judgement. “2. Atop toble audit nck :- Risk auditor take of ter giving unquatipied cpinicn ebout the Financial statement which is materraity misstated - High risk, less evidence collected 3. Ruk Facter ; - Nature of Quelit test =? use sampling = Inherent limitation => Human errors and carelesshess . ~ Uncertain audit conclusion => Cen't ind evidence | A. Audit Risk Medel => te Identify misstatements, estmeate uihere tt would Occur, Picduce responcl ger the risk. Hew Dees the Audet Risk Medel work ? Inherent tisk, Control Risk and detector Fisk are used in ocler to get the acceptable cwalit nik or Inherent Risk x Control Risk x Detecton Rak = Acceptable Audit REE 5. Matenality is when information of musstatement influence economic lec? srons on basis oF zineincial ctaternents. The concept is Fineincra) Information judgeel on qualitative anel quantitative characteristics, Relative cather then absolute, The Pases (40 evaluate matenality): Tarn over, progit berore tax, total assets,