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We decided to set Audit Risk High, Inherent Risk low, and Control Risk low. Setting Audit Risk High seems to indicate that we are convinced about the integrity of the management of Sweet Truths. The higher the Audit Risk, the lesser the evidence that has to be gathers by the auditor. Setting Inherent Risk low indicates that the confectionery industry is stable and we do not perceive any risks. The lower the Inherent Risk, the greater the evidence that the auditors needs to gather. Setting Control Risk Low indicates that we are relying on the internal control procedures that are in place in the organization...
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