Question

Inherent risk and control risk differ from detection risk in that inherent risk and control risk...

Inherent risk and control risk differ from detection risk in that inherent risk and control risk are

Functions of the client and its environment, but detection risk is not.

Elements of audit risk, but detection risk is not.

Considered at the assertion level, but detection risk is not.

Changed at the auditor’s discretion, but detection risk is not.

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Answer #1

Answer is :

Functions of the client and its environment, but detection risk is not.

Explanation:

Audit risk is the risk of expressing the inappropriate opinion on the financial statements of company and ultimately this is what the auditor is trying to avoid.

There are three elements of Audit risk. Inherent risk, Control risk and detection risk.Audit risk is the product of all above three risk.

Inherent risk and Control risk depends on the functions of the management of company where as detection risk arises when the auditor fails to detect a risk while auditing the financial statements of company.

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