Significant risk
A significant risk is an identified risk of material misstatement for which the assessment is close to the upper end of the inherent-risk spectrum, or which must be treated as significant under another ISA. It requires particular audit attention and responses under applicable standards.
Worked example
A highly subjective valuation with complex assumptions and susceptibility to management bias may be assessed as a significant risk.
Common mistake
Do not assume every large balance is automatically a significant risk or that a significant risk is only a control risk.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AA | Supporting | September 2026–June 2027 |
| ACCA | AAA (INT) | Supporting | September 2026–June 2027 |