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Audit risk

Auditing

If ROMM ⬆️ leads to detection risk ⬇️ = Audit risk⬇️ If Romm⬇️ leads to Detection Riks ⬆️ = Audit risk⬇️ I understand first case but I'm not able to get the logic of second one

07- Issac Jolly-XII C

CA Inter

★ 16K+

05-Nov-24 06:17

106

Answers (1)

Best Answer

If ROMM is less, then we can perform less substantive procedures. Meaning auditor wil keep less sample size, less procedures. So he might not be able to detect material misstatement. So detection risk is high. N overall audit risk goes down

Pradnya Bajaj

Faculty

05-Nov-24 13:53

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