What is the relationship between the three elements of audit risk

Audit risk is equal to inherent risk multiplied by control risk multiplied by inspection risk, so audit risk is composed of three elements:

1, inherent risk: refers to the possibility of a material misstatement of a determination on the accounting statements of the auditee without regard to the auditee's relevant internal control policies or procedures. It is independent of the audit of the accounting statements outside the existence of the certified public accountant can not change its actual level of risk;

2, control risk: refers to the audited unit's internal control fails to prevent or detect the likelihood of misstatement or omission of an item on its accounting statements in a timely manner. As with inherent risk, the auditor can only assess its level but cannot influence or reduce its size;

3, inspection risk: refers to the possibility that the certified public accountant fails to detect the existence of a material misstatement or omission on the audited entity's accounting statements through the scheduled audit procedures. Inspection risk is the only risk element of the audit risk elements can be controlled and managed by the CPA.