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Hello,
Risk of material mis-statement at Financial Statement Level and at Assertion Level; and does Business Risk relate to any of the ??
I am always confused for the above statement, can some please help me to differentiate and explain the above statement to understand it in a better way.
Thank you !
This comprises both the control & inherent risk and when the auditor of a client suspects they are high i.e the FS figures & the various assertions cannot be trusted the auditor wil increase detection risk by doing substantive testing & test of details so as to reduce the audit risk to a bearest minimum. Business risk are operational risk which is the responsility of mgt but auditors are basically focused on giving an independent opinion on aa FS whether they show a tru & fair view.
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assertion level means that we have to test for misstatement at assertion level. which is existence, classification, valuation, completeness, accuracy and cut off.
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