The risk that the auditors' own procedures will lead to the decision that material misstatements do not exist in the financial statements when in fact such misstatements do exist is
a. audit risk
b. inherent risk
c. control risk
d. detection risk
Answer: d. detection risk
The risk of material misstatements is composed of which audit risk components?
a. inherent risk, control risk and detection risk
b. inherent risk and detection risk
c. inherent risk and control risk
d. control risk and detection risk
Answer: c. inherent risk and control risk
When evaluating whether accounting estimates made by mangement are reasonable, the audit team would be most interested in which of the following?
a. evidence of a conservative systematic bias
b. assumptions that are similar to industry guidelines
c. key factors that are consistent with prior periods
d. measurements that are objective and not susceptible to bias
Answer: a. evidence of a conservative systematic bias
