ECONOMIC DEMAND FORAUDITING Auditing can have a significant Information risk effect on information risk If reflects the the bank manager is satisfied possibility that the information which that there is minimal the business risk information risk because a decision was made borrower's financial statements was inaccurate are audited the risk is substantially reduced and the overall interest rate to the borrower can be reduced Arens, Loebbecke; Auditing, 8/ o2000 br Prentice Hall. IncArens, Loebbecke; Auditing, 8/E © 2000 by Prentice Hall, Inc. ECONOMIC DEMAND FOR AUDITING Information Risk reflects the possibility that the information which the business risk decision was made was inaccurate. Auditing can have a significant effect on information risk. If the bank manager is satisfied that there is minimal information risk because a borrower’s financial statements are audited, the risk is substantially reduced and the overall interest rate to the borrower can be reduced