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Risk assessment procedures

Forums › ACCA Forums › ACCA AA Audit and Assurance Forums › Risk assessment procedures

  • This topic has 2 replies, 3 voices, and was last updated 12 years ago by chimombe.
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  • September 14, 2012 at 2:33 pm #47065
    imranhasan
    Member
    • Topics: 17
    • Replies: 15
    • ☆

    Could someone explain me the ” Risk Assessment Procedure” and how do auditors identify risks in financial statement?

    September 20, 2012 at 1:03 pm #75449
    pannanikt
    Member
    • Topics: 8
    • Replies: 83
    • ☆☆

    In real life they have a software with hundreds of checklists for various entities operating in various businesses. They answer questions and make a decision if the risk for the area is low, moderate or high then the software gives them the risk analysis. Questions like: is the person who posts the invoices to the ledger the same person who authorises payment – if no the risk is lower if yes the risk is higher etc. And the rest is just an experiance. There are always some important area like inventory, property valuation, repairs or capital expenditures, employment or self-employment. For example if most of the sale is for cash the risk of income being incorrect is high if everything through the bank low.They think a little like detectives – firstly collect data about enterprise, control system, who does what and how and why and then try to find the gap, the place when something may go wrong. They ask questions themselves – how can I be sure if…and then they try to confirm if the answer or figure i correct – for example sending query to bank, to suppliers

    September 21, 2012 at 1:38 am #75450
    chimombe
    Member
    • Topics: 0
    • Replies: 2
    • ☆

    good stuff

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