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جميع الحقوق محفوظة ـ اإلعتداء عىل حق املؤلف 16 بالنسخ أو الطباعة يعرض فاعله للمسائلة القانونيةB- Audit Risk Components:  Audit Risk (AR) = Inherent risk (IR) X Control Risk (CR) X Detection risk (DR) Inherent Risk: It’s the susceptibility a class of transaction, account balance or disclosure to be misstated is associated with the unique characteristics of the industry of the client.  Industries that have a heavy volume of cash transactions Or Selling Products that are hardly valuates as diamonds, will have a higher level of inherent risk than those that do not. Control risk:  is the likelihood that the internal control structure is inadequate to prevent or detect material misstatements in the transactions, accounts balance or disclosure.  Auditors assess the level of control risk by performing tests of internal controls, as creating test transactions by auditor and make sure they are properly posted Detection risk: Is the likelihood that auditor`s substantive audit procedures fail to detect material misstatements the transactions, accounts balance or disclosure.  It’s determined as the complementary of IR &CR if they are high the auditor must reduce the detection risk to reach the acceptable audit risk. Which means he needs to reduce the probability of not finding misstatements in financial statements. So, he will have to increase the level; and extent and nature of his procedures. Example on Audit Risk Model: The audit risk model is AR = IR × CR × DR Assume that acceptable audit risk is assessed at a value of 5 percent, consistent with the IR is assessed at 40 percent, and CR is assessed at 60 percent.