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Audit risk main focus in inherent risk, control risk and detection risk not only focus on financial statement, it can relate to internal control or nature of business. Risk of material misstatement is risk happened in financial statement which relate to financial reporting framework.
All the above is my understanding.
Audit Risk
Risk that auditor expresses and inappropriate opinion when FS are infact MM.
Audit Risk = Risk of MM + Detection RiskRisk of MM
Risk that FS are MM prior to the audit.
Risk of MM has 2 components1.Inherent Risk
2.Control Risk
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