In Practice, Auditors Rarely Assign Numerical Probabilities to Inherent Risk

Essay

In practice, auditors rarely assign numerical probabilities to inherent risk, control risk, or audit risk. It is more common to assess these risks as high, medium, or low. For each of the four situations below, fill in the blanks for detection risk and the amount of evidence you would plan to gather ("planned evidence") using the terms high, medium, or low.
SITUATION
$$\begin{array} { | l | l | l | l | l | } \hline & 1 & 2 & 3 & 4 \\\hline \text { Audit risk } & \text { Low } & \text { Low } & \text { High } & \text { High } \\\hline \text { Inherent risk } & \text { High } & \text { Low } & \text { Low } & \text { Low } \\\hline \text { Control risk } & \text { High } & \text { Low } & \text { Medium } & \text { Low } \\\hline \text { Detection risk } & & & & \\\hline \begin{array} { l } \text { Planned } \\\text { evidence }\end{array} & & & & \\\hline\end{array}$$