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Essay text:
Lastly, I will explain how the three risks that make up audit risk inter-relate.
Simulation
For Sweet Truths, certain accounts such as cash, lines of credit, and intangibles have to be audited 100 percent because they are generally composed of few transactions that are easy to verify. Plus these accounts are relevant to the confectionary industry.
Materiality is allocated only to those accounts that are sampled because the accounts that are audited 100 percent do need to have materiality allocated to them. Inventory, property, plant and equipment, and accounts payable involve numerous transactions and would be time-consuming to audit them thoroughly...
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