74 0 obj Audit risk is the risk that the auditor expresses an inappropriate audit opinion on the financial statements. /Length 3094 Administrative time makes up a significant portion of the audit plan. /SM 0.02 startxref 0000001493 00000 n <<
0000002362 00000 n /Size 83 Identifying and assessing audit risk is a key part of the audit process, and ISA 315, Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and Its Environment, gives extensive guidance to auditors about audit risk assessment. In the particular instance of Enron, the company auditors, Arthur Anderson, were alleged to have lacked sufficient understanding of the business, risks and exposures of the Company which ultimately caused them to overlook the effects of Enron’s aggressive accounting practices.It is in view of such scandals that the adoption of a top down approach in auditing has been emphasized where the auditor proceeds by gaining an understanding of the entity, its environment, significant business risks and how these risks might translate into audit risks.ISA 315 requires auditors to obtain an understanding of the entity and its environment in order to assess the risks of material misstatement of financial statements. ���^������Z c���@IE��� {�W /FontFamily (Times New Roman) endobj The estimate may be biased and not based on realistic assumptions regarding the sales price.The effect of provisional pricing and any future revisions in price may not be adequately disclosed in the financial statement.The managing director apprised the Board regarding plans to drill a second exploratory well in an area.The drilling of the first exploratory well in the same area in the previous period could not be successful due to unsuitable rock formation.The cost to be incurred on drilling of the second exploratory well may not be recoverable if a similar rock formation to the first well is discovered.Exploration and evaluation assets of the company may be overstated as a result of the unsuccessful exploratory well whose cost must be immediately expensed in the income statement.The cost incurred in the current period, if any, on the second well may also not be recoverable in which case the assets of Energy PLC may be overstated.In view of the high profile accounting scandals in recent times, the role and responsibilities of auditors has been questioned. /Type /Page << /Resources << /ExtGState << /GS1 75 0 R >> /Font << /TT2 76 0 R >> /XObject /Info 69 0 R
0000000689 00000 n /Subtype /TrueType << 0000000766 00000 n 0000002080 00000 n /N 23 /Root 73 0 R /Length 307 /Type /XObject /Pages 66 0 R 73 0 obj /Width 194 Follow the advice in this risk assessment infographic to … )i��H�8��Fi�4���v�"�;��\���o`��&��K��+���S��'� �V�e�y;,g� �� �� ������?�y|�4~'������bF�5EI��L��Q�C���8X���.b�%�E�PC+�OA� ���$X�)�1���1��{N�/`s��q��u�Q�g�Q�#y5,�/N��y�V�Q?��,�~���`|Ug�wU��q5�f��/����O:��||� *f�&Gz6�?s��r�Z���ذHn\k��ύz322����[���M���pO�Ȕ�۞�Ơ�2r�"���oo��� ��kE��3��)R��F��Q�/^���������ȥQo�R+�s�mXN{��xN��ʩ�;958�|f����e�l鑍��f�p����$vߛ��
0000006011 00000 n 500 500 333 389 278 500 500 722 500 500 444 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 stream /Contents 78 0 R 0000002639 00000 n /H [ 766 397 ] endobj 72 0 obj He loves to cycle, sketch, and learn new things in his spare time. /Encoding /WinAnsiEncoding Audit risk therefore includes any factors that may cause a material misstatement or omission in the financial statements. >> /Linearized 1 /FirstChar 32 /LastChar 150 e��r���L�I���P̖`)]%��\���� i�~� /OP false >> Signs For A Risk Assessment and Audit Planning Makeover Audit Plan is restricted to what “IA can audit today” vs. what “IA should audit tomorrow”. x��y8���c�C�$S̛A�k5�d�4"k����&�4�R&C1��15�d�B�-Kd���f����}�{�s��:�=����u����~��s?��߃}� ���Y'���@��!7�m�WA���Q���F��wbv*+���ǘ�ZXZ����4�32�0�.E�!�JHl5ݡ���/�@��*� /Prev 141508 >> Information Technology - See Appendix D for detailed risk assessment for IT areas. /FontWeight 400 <<