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Class_9web - Risk in auditing Risk sThe auditor accepts...

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Risk in auditing Risk in auditing The auditor accepts some level of uncertainty when performing an audit There is always a small likelihood remaining that the financial statements may be in error Audit procedures are designed to satisfy audit objectives and to reduce the probability of errors or other misstatements in the financial statement.
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EXAMINATION STANDARDS #1. The auditor should plan & perform the audit to reduce audit risk to an acceptably low level that is consistent with the objectives of an audit.
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Audit Risk Assessment Audit Risk Assessment Audit risk is the risk that audited financial statements that are materially misstated will go out to users. Audit risk can be modelled conceptually as a function of: inherent risk, control risk, and detection risk.
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How can an auditor How can an auditor reduce reduce achieved achieved audit risk audit risk ? ? audit risk evidence and cost achieved risk acceptable risk sufficient, appropriate gather gather more more evidence evidence
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Inherent Risk “IR” Inherent Risk “IR” The probability of material misstatement occurring in transactions entering the accounting system or being in the account balances is inherent risk. IR is outside the auditor’s control
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Class_9web - Risk in auditing Risk sThe auditor accepts...

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