Risk response
An audit risk response is the action designed to address an assessed risk of material misstatement, including overall responses and further procedures at assertion level. It should be linked to the particular risk and intended evidence.
Worked example
To address overstatement of revenue from early recognition, the auditor tests dispatch and contract terms around year end.
Common mistake
A generic instruction to “increase testing” is less useful than a procedure linked to the identified assertion and risk.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AA | Direct | September 2026–June 2027 |
| ACCA | AAA (INT) | Direct | September 2026–June 2027 |