[reloadedxp]

I need help with questions that pertain to determining the impact on the component of audit risk.

Decrease/Increase Control Risk

Decrease/Increase Detection Risk

Decrease/Increase Inherent Risk

What do you think is an easy way to spot if its I, C, or D? Thanks!

[Sportiegrl13]

If Reliance is high, Control Risk (RMM) is low then Detection Risk is High, do less Substantive Testing

If Reliance is low, Control Risk (RMM) is high then Detection Risk is Low, do More Substantive Testing

Does what I just posted make any sense? This is something I post on all my sheets of paper when studying, it is the first thing I wrote down when I took AUD in May. It helped me with MCQ BIG TIME!

As far as the easy way to spot if it is IR, CR, or DR – that is something I need help with too!

"Believe in yourself! Have faith in your abilities! Without a humble but reasonable confidence in your own powers you cannot be successful or happy." - Norman Vincent Peale

Starting the CPA journey, again after taking a couple year hiatus!
AUD - 68, retake 7/23/13!
FAR - Early October
REG -
BEC -

[reloadedxp]

Sportiegrl13, I am good with RMM inc, D dec, Subs test Inc (vice versa), but questions like “the company extended its existing warranty program on some of its major products in an effort to increase revenue” – whats the impact on component of audit risk? The answer was INCREASE INHERENT RISK.

[Sportiegrl13]

Oh, Okay! Whoops, misunderstood your question.

Well, hopefully someone can answer because I am also struggling with MCQ/TBS regarding questions like that.

"Believe in yourself! Have faith in your abilities! Without a humble but reasonable confidence in your own powers you cannot be successful or happy." - Norman Vincent Peale

Starting the CPA journey, again after taking a couple year hiatus!
AUD - 68, retake 7/23/13!
FAR - Early October
REG -
BEC -

[Zaq]

DR relates to how the auditor handles risk.

IR relates to how a company handles risk assuming no control risk are implemented.

CR relates to how a company prevents/detects risk with their implemented internal control.

There's a simulation in Becker that breaks down certain events that impact IR, CR, and DR. If you use the above three facts, you should be able to determine if it's an IR, DR, CR.

Then you have to use judgement to see if the company's risk increases or decreases. Usually, taking risky business ventures to increase revenue leads to an increase in risk, whereas, taking precautionary actions to reduce risk tend to stick out like a sore thumb.

FAR: 50, 76!
REG: 74... (ouch baby, very ouch), 76!
AUD: 65, 91!?
BEC: 80! Aaaand doneskies!

May 2012 to August 2013. Can't believe it's over.

[Author]

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