Activity Based Risk Evaluation Model of Auditing

Accept/Reject Knowledge Test

The following is a short test of your understanding of audit risk concepts as they apply to the client acceptance/rejection decision. You will be tested on your understanding of:

• the acceptable level of audit risk at the financial statement level.
• the achievable level of audit risk at the financial statement level.
• factors relevant to the evaluation of the achievable level of audit risk, namely:
• • inherent risk at the financial statement level.
  • control risk at the financial statement level.
  • detection risk at the financial statement level.
• how the above evaluations help the auditor decide whether to accept or reject an entity as a new client.

Copyright, Australian Educational Research Pty Ltd. Any person accessing this site agrees to the Terms of Use.