Business risk approach, Auditing

Business Risk Approach

This approach requires the auditor to determine what are the very important business risks which the client faces. This line of approach both helps the client and also enables the auditor to appreciate and understand his clients business and appreciate all aspects of the business activities. It is then for the auditor to determine where the risks are likely or unlikely and whether the risks are likely to produce serious consequences. This enable the audit to be focussed on those matters where there is a possibility of misstatement. This is the basis of revised auditing standards.

The big firms have largely adopted this approach within their audit methodology.

The history of auditing shows a gradual change over time as detailed testing of transactions moved to system audits. The next development was the audit risk model which focuses the audit and the extent of audit procedures on to the areas of an audit where the auditor was most at risk of giving an inappropriate opinion.

Here we consider concept of risk from the view point of the business as a whole.

Posted Date: 12/3/2012 5:58:50 AM | Location : United States







Related Discussions:- Business risk approach, Assignment Help, Ask Question on Business risk approach, Get Answer, Expert's Help, Business risk approach Discussions

Write discussion on Business risk approach
Your posts are moderated
Related Questions
? Decide what areas of the company will be audited and the frequency of the audits. Prepare a yearly audit schedule and distribute. ? Make an audit plan. Decide what other audit r

The Tonka Manufacturing Company conducts its annual physical inventory at the end of the calendar year as a result of the auditor's assessment of non-operating internal controls in

Question : Describe the methodology and process of conducting an audit. Define audit Describe the methodology of conducting an auditĀ  Describe the process of conduc

procedures for verifying a fixed assets

Q. Corporations generally issue stock dividends in order to a. increase the market price per share. b. exceed stockholders' dividend expectations. c. increase the marketability of

You have been assigned to carry out a stock take in a company. Your Audit Supervisor has given you with an audit programme. As part of a briefing session to your juniors, you a

Advantages and Disadvantages of Joint Audits The general disadvantages and advantages of joint audits as: Advantages 1. All fees and work are welcome to audit firms. 2. A

Audit of Holding Companies and Group Accounts Authoritative documents are as: The Companies Act Cap 486 IAS 27 IAS 28 IAS 31 IFRS 3 ISA 600 r

The following situations involve a possible violation of the MIA ByLaws (on professional ethics, conduct and practice). For each situation, (1) decide whether or not the Code has b

Judgmental Sampling Judgment sampling is where the auditor using his own experience and knowledge of the client's business and circumstances selects the sample to be tested wi