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As a new auditor, is opening balance considered to be applicable to both RoMM and Audit risk or audit risk?
Is it inherent risk or detection risk?
There is an element of both – there is a ROMM in the current period’s financial statement if the opening balances were misstated. Detection risk is increased because, as the audit is new, the possibility that the auditor might select inappropriate audit procedures is increased.
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Thank you for your reply 🙂
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