The business risk approach to auditing, Auditing

Assignment Help:

The Business Risk Approach to Auditing

In recent years the broader concept of business risk has been developed by the larger firms. It was the subject matter of the ICAEW auditing road show ‘Tomorrow’s audit today’ in the late 1990s in UK. The notion has not been fully refined although its major principles are now well established.

Business risk is the hazard that an event or action will harmfully affect a business’s capability to achieve its ongoing objective. It can be split among external and internal factors.

The business risk approach to auditing includes examining the business in it’s wholly and evaluating the various risks to which it is exposed. The business risks are factors that affect the company’s capability to meet its goals. The risks might be controllable (to a few extents) or uncontrollable (for illustration, external factors). It may be possible to trade-off some risks (e.g. assurance). The auditor is anxious about those risks which might impact upon the financial statements and thus needs a full understanding of the business and its risks in order to do this. The auditor will then plan the audit policy with these business risks obviously focused in mind.


Related Discussions:- The business risk approach to auditing

Meaning of true in auditing, Meaning of True in Auditing Meaning of 't...

Meaning of True in Auditing Meaning of 'true and fair'/present fairly' Truth in accounting is quite different form scientific truth.  Accounting does without a deal along w

Standard defines development and research, Standard Defines Development and...

Standard Defines Development and Research The standard defines development and research as follows: (a) Research - planned and original investigation undertaken along with

Need for an audit, Need for an Audit Whether you take an example for a...

Need for an Audit Whether you take an example for a modern large liability company, such we can clearly differentiate between those who control those funds the providers of fu

Specialized audit situations, Specialized Audit Situations Companies c...

Specialized Audit Situations Companies carry on thousands of different types of trade, business or professional activities.  It is not possible in a manual on general auditing

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

Ias 40 investment properties, IAS 40 Investment Properties Audit work ...

IAS 40 Investment Properties Audit work common to all kinds of land and building will be used to establish ownership, existence and price. IAS 40 requires such companies may a

When does an audit trail start, Question: Explain the type of audit con...

Question: Explain the type of audit conducted by the sponsor when he suspects or comes to know that the site will be audited by FDA. A Mention type of audit conducted by the

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

International auditing and assurance standards board, The International Aud...

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

Existence - detailed audit of stock, Existence - Detailed Audit of Stock ...

Existence - Detailed Audit of Stock In the previous the auditor accepted a director's certificate as to the existence of stocks.  Until some cases specifically in the United S

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