The audit risk model explains how audit risk (AR) is a function of inherent risk (IR), control risk (CR), and detection risk (DR). AR is minimized by lowering IR through the client's internal controls (CR) and the auditor's testing and review procedures (DR). The components of the model are AR, IR, CR, and DR.

1. Audit Risk Model
Explaining how it works

2. The model
IR
CR AR
DR

3. The Components
AR: Audit Risk
IR: CR: DR:
Inherent Control Detection
Risk Risk Risk

4. Minimising AR
CR
IR
DR
AR