Calculate the Risk of Material Misstatements and Detection R…
Calculate the Risk of Material Misstatements and Detection Risk (Rounded to the Nearest .01) for the following audit engagements: Audit Risk Inherent Risk Control RiskCompany A 0.05 0.70 0.70 Risk of Material Misstatement [answer1] Detection Risk [answer2] Audit Risk Inherent Risk Control RiskCompany B 0.01 0.30 0.50 Risk of Material Misstatement [answer3] Detection Risk [answer4] What is a reasonable basis for Company A having a Higher Level of Audit Risk than Company B? [answer6] Given the information above, which engagement will require higher Auditor Effort in order to cover their acceptable level of Audit Risk? Company A or Company B? [answer5]
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