Audit. Risk and its use in auditing (most important)

Lecture notes, cheat sheets
Free library / Directory / Lecture notes, cheat sheets

Audit. Risk and its use in auditing (most important)

Lecture notes, cheat sheets

Table of contents (expand)

20. RISK AND ITS USE IN AUDITING

Auditor risk means the likelihood that the financial statements of the organization may contain material undetected errors and (or) misstatements after confirmation of their reliability or recognize that they contain material misstatements when in fact there are no such misstatements in the financial statements. Thus, audit risk is essentially depends on two factors:

1) from the risk of significant inaccuracies or errors in the financial statements;

2) from the risk of incorrect conclusions of the auditor about the absence of significant inaccuracies (errors or even veiled abuses) in the financial statements due to their undetected.

From a practical point of view, audit risk consists of a set of risks. Typically, the following are distinguished: main types of risks:

1) audit or general risk;

2) internal risk;

3) control risk;

4) risk of non-detection;

5) risk analysis;

6) risk during substantive checks;

7) the risk of selective research;

8) entrepreneurial risk, etc. In the rule (standard) of audit activity No. 8 "Assessment of audit risks and internal control carried out by the audited entity", there are three types of risks that are of the greatest importance:

1) the risk of economic activity;

2) the risk of organizing internal control;

3) the risk of non-detection.

Definition given by the standard "inherent risk" means the susceptibility of an accounting balance or a group of similar transactions to misstatements, which could be material, given the absence of necessary internal controls. However, in the practice of Russian auditors, more components of audit risk are also evaluated.

Audit risk is made up of:

1) the risk that the auditor bears due to the fact that a separate accounting account contains material errors (consists of two components - on-farm risk and control risk);

2) the risk in which audit procedures do not allow to detect real-life violations (the risk of non-detection).

<< Back: Identification of misstatement of financial statements

>> Forward: Internal control system and methods of its evaluation

We recommend interesting articles Section Lecture notes, cheat sheets:

▪ Logistics. Crib

▪ Social Psychology. Crib

▪ Children's surgery. Lecture notes

See other articles Section Lecture notes, cheat sheets.

Read and write useful comments on this article.

<< Back

Latest news of science and technology, new electronics:

The existence of an entropy rule for quantum entanglement has been proven 09.05.2024

Quantum mechanics continues to amaze us with its mysterious phenomena and unexpected discoveries. Recently, Bartosz Regula from the RIKEN Center for Quantum Computing and Ludovico Lamy from the University of Amsterdam presented a new discovery that concerns quantum entanglement and its relation to entropy. Quantum entanglement plays an important role in modern quantum information science and technology. However, the complexity of its structure makes understanding and managing it challenging. Regulus and Lamy's discovery shows that quantum entanglement follows an entropy rule similar to that for classical systems. This discovery opens new perspectives in the field of quantum information science and technology, deepening our understanding of quantum entanglement and its connection to thermodynamics. The results of the study indicate the possibility of reversibility of entanglement transformations, which could greatly simplify their use in various quantum technologies. Opening a new rule ... >>

Mini air conditioner Sony Reon Pocket 5 09.05.2024

Summer is a time for relaxation and travel, but often the heat can turn this time into an unbearable torment. Meet a new product from Sony - the Reon Pocket 5 mini-air conditioner, which promises to make summer more comfortable for its users. Sony has introduced a unique device - the Reon Pocket 5 mini-conditioner, which provides body cooling on hot days. With it, users can enjoy coolness anytime, anywhere by simply wearing it around their neck. This mini air conditioner is equipped with automatic adjustment of operating modes, as well as temperature and humidity sensors. Thanks to innovative technologies, Reon Pocket 5 adjusts its operation depending on the user's activity and environmental conditions. Users can easily adjust the temperature using a dedicated mobile app connected via Bluetooth. Additionally, specially designed T-shirts and shorts are available for convenience, to which a mini air conditioner can be attached. The device can oh ... >>

Energy from space for Starship 08.05.2024

Producing solar energy in space is becoming more feasible with the advent of new technologies and the development of space programs. The head of the startup Virtus Solis shared his vision of using SpaceX's Starship to create orbital power plants capable of powering the Earth. Startup Virtus Solis has unveiled an ambitious project to create orbital power plants using SpaceX's Starship. This idea could significantly change the field of solar energy production, making it more accessible and cheaper. The core of the startup's plan is to reduce the cost of launching satellites into space using Starship. This technological breakthrough is expected to make solar energy production in space more competitive with traditional energy sources. Virtual Solis plans to build large photovoltaic panels in orbit, using Starship to deliver the necessary equipment. However, one of the key challenges ... >>

Random news from the Archive

Developed a camera that shoots without glare 07.04.2016

Scientists from the Massachusetts Institute of Technology (USA) have developed a technology that will allow photographers to shoot on a digital camera through glass without glare. The new system was developed in collaboration with Microsoft Research engineers and is based on the depth sensor used in Kinect gaming systems.

The camera emits light of a certain frequency and evaluates the intensity of the reflection of the rays by the window pane and more distant objects.

The control algorithm uses the Fourier transform and splits the signal into component frequencies, characterized by two properties: amplitude and phase. It determines the displacement of the waves, and the phase measurement allows you to calculate the time of arrival of the signal.

The novelty takes about a minute to convert a photo and remove glare from the image, but the developers are confident that over time the process can be accelerated.

Other interesting news:

▪ Mouse Virtual Reality Headset

▪ Wind turbine with laser

▪ Watches on belts instead of gears

▪ DC-DC converter SPB05 5W in SIP package

▪ The danger of antiseptics

News feed of science and technology, new electronics

Interesting materials of the Free Technical Library:

▪ site section Tone and volume controls. Article selection

▪ article Your gift is not dear to me. Popular expression

▪ article How long has body temperature been considered one of the indicators of human health? Detailed answer

▪ article Pruning with low-handle petrol powered saws. Standard instruction on labor protection

▪ article Simple push-pull amplifier. Encyclopedia of radio electronics and electrical engineering

▪ article Refinement of AS imported mini-systems. Encyclopedia of radio electronics and electrical engineering

Leave your comment on this article:

All languages of this page

Home page | Library | Articles | Website map | Site Reviews