Question

Which of the following audit risk components may be assessed in qualitative terms?

1) Risk of material misstatement.
2) Detection risk.
3) Neither risk of material misstatement nor detection risk.
4) Both risk of material misstatement and detection risk.

Answer 1

The risk of material misstatement and detection risk can be assessed in qualitative terms.

Step-by-step explanation:

The audit risk components that may be assessed in qualitative terms are the risk of material misstatement and detection risk. Both of these components can be evaluated using qualitative measures based on the auditor's professional judgment and experience.