Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
AUDIT RISK
As we have seen many parties rely on the audit opinion to make decisions, and therefore it is now a well established fact that if the auditor gives an audit opinion that is wrong in some particular then they stand a chance of suffering some damage.
Audit risk therefore could be defined as the chance of damage to the audit firm as a result of giving an opinion that is wrong in some particular. Or put another way, it could be explained as the possibility that financial statements contain material mis-statements which had escaped detection by both an internal control on which the auditor has relied and on the auditor's own substantive tests and other work.
It could be looked at also as: the possibility that the auditor may be required to pay damages to the client or other persons as a consequence of:1. The financial statements containing a mis-statement;2. The complaining party suffering a loss as a direct consequence of relying on the financial statement and 3. Negligence by the auditor in not detecting any reporting on the mis-statement which can be demonstrated.
Damage to the audit firm or the auditor may be in the form of monetary damages paid to the complainant as compensation or simply damage to their reputation with a client or the business community.
All audits involve an element of risk such that however strong the audit evidence and however careful the auditor, there is always a possibility of an error or a fraud going undetected. It is generally known that the auditor who organises his office and staff in a competent manner and follows auditing standards and guidelines is unlikely to be found negligent and to pay damages as a consequence of fraud or error not being discovered by him.
Audit risk can be either normal or higher than normal.
Irregularities: Irregularities can be explained as intentional distortions of financial statements for whatever reason and also as misappropriation of possessions whether or no
Statistical sampling – Advantages a) It is scientific and defensible; b) It provides a precise mathematical statement about probabilities of being correct; c) It is efficie
Investment - Audit Process The investment is held for wealth generation that as interest and dividends on shares and capital growth and loan notice. Recent investments are re
Research and development Panorama Ltd manufactures and distributes a wide range of general pharmaceutical products. Selected audited data for the reporting period ended 31 Dec
The International Auditing and Assurance Standards Board The IAASB is a Board familiar by IFAC. The associates of the IAASB are selected by the IFAC Board to serve on IAASB. IA
The Need for an Audit If you take an example of a modern large liability company, we can clearly distinguish between the providers of funds and those who control those funds. The
Procedures that Auditor Adopts The auditor’s procedures will include: (1) Getting an understanding of the entity as a whole in order to see the accounting system in proper per
General phases of control evaluation are: Phase 1: Understand and document • Understand the client's internal control • Document the understanding of internal control o
what are the things we need to check in statutory audit of bank?
Develop a list of tasks the auditor should perform in planning this audit engagement, before any audit testing begins. Handbook section CAS 315 lists management assertions embod
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd