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CHAPTER 18 AUDITING INVESTMENTS AND CASH BALANCES Spring 2007 - page 13 / 26

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Investments: Determining Detection Risk

Determine detection risk for each audit objective based on audit risk model after assessing:

Inherent risk

Control risk

Risk that analytic procedures would fail to detect material misstatements.

Need to combine assessments w/ those for cash disb and cash receipts

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