RISK ASSESSMENT

Topics: Risk, Risk assessment, Financial audit Pages: 4 (1988 words) Published: October 22, 2014

Risk assessment procedures include enquiry, analysis, observation, inspection and testing. Suspetabiltiy of Defalcation??judgments about materiality are made in light of surrounding circumstances, and are affected by the size or nature of a misstatement, or a combination of both; and judgments about matters that are material to users of the financial statements are based on a consideration of the common financial information needs of users as a group.??? Materiality is modified by segment in response to differences in anticipated errors and risks by segment. Consider the following unrecorded liabilities:

An understated provision for warranty costs.
A shipment of goods received from a supplier just before year-end, but not recorded. Would these errors be of equal concern to investors?
Could the client record an adjustment to the recorded A/R, as a result of the auditors’ work? Sufficient appropriate auditing evidence: SAAE
Risk assessment procedures include enquiry, analysis, observation, inspection and testing. Suspetabiltiy of Defalcation??judgments about materiality are made in light of surrounding circumstances, and are affected by the size or nature of a misstatement, or a combination of both; and judgments about matters that are material to users of the financial statements are based on a consideration of the common financial information needs of users as a group.??? Materiality is modified by segment in response to differences in anticipated errors and risks by segment. Consider the following unrecorded liabilities:

An understated provision for warranty costs.
A shipment of goods received from a supplier just before year-end, but not recorded. Would these errors be of equal concern to investors?
Could the client record an adjustment to the recorded A/R, as a result of the auditors’ work? Sufficient appropriate auditing evidence: SAAE
Risk assessment procedures include enquiry, analysis, observation, inspection and testing. Suspetabiltiy of...
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