Understanding Audit Planning and Risk Assessment in Auditing

School: University of Melbourne - Course: ACCT 90014 - Subject: Accounting

Audit Planning - Risk Assessment ACCT30004 Auditing and Assurance Services

Topic Objectives 3At the end of this topic you should be able to: •Describeandexplainphases of an audit •Describeandexplainthe procedures used to understand the entity and it's environment •Explainrequirements on auditors to consider fraud in the planning process •Describeandexplainthe effect of business risk on audit planning •Describeandexplainthe audit risk model and its components •Definemateriality and discuss the importance of materiality to the auditor •Describethe alternative audit strategies and the relevant audit procedures •Applythe relevant concepts to practical situations

Risk Assessment 4This Week Tx book: 8.3 Copyright The managerment team of the company or our clients are in control of the business risks Audit Risk Textbook Ref: 8.7Business Risk - Definition •Business risk means a risk resulting from significant conditions, events, circumstances, actions or inactions that could adversely affect an entity's ability to achieve its objectives and execute its strategies, or from the setting of inappropriate objectives and strategies -ASA 315.4(b) •Broad perspective - really understand the risks of the business -Not just financial statement risks -Consider risks that might lead to financial consequences(material misstatements)