In this Video we will see the relationship of Audit Risk with Inherent Risk, Control Risk and Detection Risk
Audit Risk = Function of ( Inherent Risk, Control Risk , Detection Risk)
AR= IR* CR* DR
DR= AR/ IR* CR
Thus Detection risk moves in Opposite Direction to Inherent Risk and Control RisK
Means
Lower the Inherent Risk and Control Risk Higher the Detection risk
Higher the Inherent Risk and Control Risk Lower the Detection risk
Audit Risk = Function of ( Inherent Risk, Control Risk , Detection Risk)
AR= IR* CR* DR
DR= AR/ IR* CR
Thus Detection risk moves in Opposite Direction to Inherent Risk and Control RisK
Means
Lower the Inherent Risk and Control Risk Higher the Detection risk
Higher the Inherent Risk and Control Risk Lower the Detection risk
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