09-20-2005, 09:50 AM
In some audit texts, following formula is given to understand the relationships between these various risks
AR = IR X CR X DR
So you can see that there is inverse relationships between IR, CR and DR.
To decrease DR; one would modify the level of testing based on assessment of IR and CR.
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http//s4.invisionfree.com/AccountingWorld/
AR = IR X CR X DR
So you can see that there is inverse relationships between IR, CR and DR.
To decrease DR; one would modify the level of testing based on assessment of IR and CR.
===========================================
http//s4.invisionfree.com/AccountingWorld/
