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Unformatted text preview: auditor is also likely to face greatest legal exposure in situations where external users rely heavily upon the statements. Therefore, the auditor should be more certain that the financial statements are correctly stated. c. True. The reasoning for c is essentially the same as for b. d. True. The audit opinion issued by different auditors conveys the same meaning regardless of who signs the report. Users cannot be expected to evaluate whether different auditors take different risk levels. Therefore, for a given set of circumstances, every CPA firm should attempt to obtain approximately the same audit risk. 9-33 Risk Factor Related Audit Risk Model Component 1. Acceptable audit risk 2. Control risk 3. Acceptable audit risk 4. Inherent risk 5. Planned detection risk 6. Acceptable audit risk 7. Inherent risk 8. Inherent risk 9. Planned detection risk 10. Control risk...
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This note was uploaded on 04/11/2010 for the course ACCT 422 taught by Professor Blake during the Spring '10 term at MD University College.
- Spring '10