Audit Risks And Key Success Factors For Effective Risk Assessment

More than ever before, financial statement users are relying on the judgement and opinion of auditors to make calculated decisions.

Audit, which has gone beyond mere substantive tests and risk assessment, requires auditors not only to assess the risk of material misstatement in the financial statement but also to evaluate the risk that the controls giving rise to the financial statements are weak and unreliable.

What is Audit Risk?

Audit risk is the risk that auditors give an incorrect opinion stating that material misstatements are non-existent meanwhile the financial statements are materially flawed. Auditors are responsible for developing the audit risk model, which should identify and assess the risk of material misstatement and address the risks by putting in place appropriate audit procedures to reduce the audit risk.