Part a for 5 marks required candidates to explain audit risk model and its components.

This question was  answered well by the majority of candidates.

Most were able to define audit risk as being the risk of the auditor giving an incorrect opinion and to list the  components of inherent, control and detection risk. The definitions of control and detection risk tended to be  better than for inherent risk, where many candidates did not include that inherent risk is before consideration of  any controls. In addition few candidates mentioned that audit risk is a function of the risk of material  misstatement and detection risk.

Where candidates did not tend to score well this was due to a failure to understand exactly what audit risk is with answers such as “audit risk is the risk of the financial statements containing material misstatements”. Also some candidates simply gave a formula for audit risk of IR X CR X DR.