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Audit risk –

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › Audit risk –

  • This topic has 5 replies, 3 voices, and was last updated 9 years ago by MikeLittle.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • May 30, 2015 at 8:45 am #250435
    monica786
    Member
    • Topics: 10
    • Replies: 44
    • ☆☆

    Hi,

    I get abit confused on the following:

    explain audit risk
    evaluate audit risk

    With evaluate do I go on to explaining the significance of each audit risk?

    Thank you!

    Monica

    May 30, 2015 at 6:44 pm #250725
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23316
    • ☆☆☆☆☆

    Hi Monica

    This is an awful question! Literally the word “evaluate” means “put a value on”

    How is it possible to put a value on audit risk?

    You can put a value on materiality thresholds.

    You can put a value on present value of future pension obligations

    You can put a value on items put into the hands of an auctioneer for the television programme, Flog It

    But how do you put a value on audit risk?

    Instead, the examiner is looking for an intellectual paper that identifies audit risk and its various components and assesses how relatively material / important those risks are

    I assume that you are comfortable with having to “explain audit risk”

    May 30, 2015 at 9:24 pm #250762
    monica786
    Member
    • Topics: 10
    • Replies: 44
    • ☆☆

    Thank you very much Mike!

    May 30, 2015 at 11:27 pm #250772
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23316
    • ☆☆☆☆☆

    You’re welcome

    September 28, 2015 at 1:36 pm #273995
    llmaqe
    Participant
    • Topics: 6
    • Replies: 59
    • ☆☆

    Dear Tutor,

    There is an Exam Focus Point in BPP and it says students lose marks by not stating the category of the audit risk, e.g. Inherent Risk, Control Risk, etc. And in their example, they classify risks according to these sub-headings.

    However, the ACCA solutions do not have these sub-headings.

    Kindly assist.

    September 28, 2015 at 8:23 pm #274034
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23316
    • ☆☆☆☆☆

    I’m not sure about losing a mark. Surely it’s no extra effort to include the audit risk category in an answer if you know it. I found don’t know it then ……. don’t include the category!

    But positively losing a mark – I’m really not prepared to go that far

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