Business risk approach, Auditing

Assignment Help:

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.


Related Discussions:- Business risk approach

Adjusting events - audit process, Adjusting Events - Audit Process Adj...

Adjusting Events - Audit Process Adjusting events are those such give evidence of conditions such existed at the balance sheet date as the settlement of a court case than the

Related party transactions, Related Party Transactions Related party t...

Related Party Transactions Related party transactions-a transfer of obligations or resources among related parties, regardless of whereas a price is charged. A party is rel

Procedures in evaluating the work of expert, Procedures in Evaluating the W...

Procedures in Evaluating the Work of Expert The auditor must get reasonable assurance which the expert's work constitutes suitable audit evidence in based of the financial inf

Audit of accounting estimates, Audit of Accounting Estimates An accoun...

Audit of Accounting Estimates An accounting estimate is described in ISA 540 Audit of Accounting Estimates as 'an estimation of the amount of an item in the absent of a precis

Preliminary engagement, during the preliminary stage of an audit, an audito...

during the preliminary stage of an audit, an auditor most likely would not do the following

Internal control systems, Internal Control Systems ISA 400: “Internal c...

Internal Control Systems ISA 400: “Internal control system” means all the policies and processes (i.e., internal controls) accepted by the management of an entity to assist in

Code of ethics for auditor, Fitri, a sole proprietor in pulic practice, pla...

Fitri, a sole proprietor in pulic practice, plans to establish a separate department that will provide internal audit service to his audit clients.

Prepayments - audit process, Prepayments - Audit Process Prepayments s...

Prepayments - Audit Process Prepayments similar to accruals are not mostly checked through the double entry system. This creates them susceptible to mistake. The auditor's pro

Auditing question, As an auditor, how would you react to the following situ...

As an auditor, how would you react to the following situation? The company produced photocopies of fixed deposit receipts as the original receipts were kept in the iron safe of the

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd