Audit risk (AR)is a quality criterion based on professional judgment.

Question

Quizplus · Accepted Answer

Audit risk is a quality criterion that is based on professional judgment and is used to assess the overall risk of a material misstatement in financial statements. It includes inherent risk, control risk, and detection risk. Professional judgment is necessary to determine the appropriate level of detection risk needed to reduce the overall audit risk to an acceptable level.

Audit Risk (AR)is a Quality Criterion Based on Professional Judgment