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Hello, Sir.
I have one question to ask:
There are three types of risk: lower, higher, significant.
Whereas it is possible to determine the significant risk based on various factors, how can we identify higher risk? how does it differ from significant risk?Thank you for your answer in advance!
I am not in my office until Tuesday, so I suggest you word search for “spectrum” in our notes. “Significant risk” is a defined term related to the spectrum of inherent risk. A significant risk must have a substantive audit response.
“Low” and “high/higher” are not technical terms, they simply have normal English meanings. Immaterial amounts by definition would have a low/negligible risk of material misstatement.
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