Preliminary Assessment, Inherent Risk and Key Assertions of an Audit

The purpose of risk assessment is not to remove risks, but to take reasonable steps to reduce them. The process involves looking at the risk, and considering what can be done to make it less likely that the risk will develop into a reality. This can be done through implementing policies and codes of practice, acting in individual’s best interests, fostering culture of openness and support being consistent, maintaining professional boundaries and following systems for raising concerns.

3.4 summarise the types of risks that may be involved in assessment in own area of responsibility.

For the case study provided with this Assessment Task, you are required to review risk management processes and determine scope and objectives, taking into account stakeholder input and both internal and external environmental factors affecting the organisation. With the information gathered, you are

* From the e-Activity, choose one (1) of the eight (8) steps in the Clarified Auditing Standards–Learning and Implementation Plan. Based on the step you have chosen, analyze support for the action plan proposed, and make at least two (2) recommendations that would improve support of the action plan.

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A risk assessment is a health and safety procedure, which requires a member of staff or line manager to carry out an examination; on what could cause danger and create harm to anyone within the work environment. During my time at One World nursery, a staff member would carry out a risk assessment every day; within their located room also there would be someone who will carry out a risk assessment outside in the garden.

6. The risk assessment team will conduct an inspection of the department/area being assessed for risk or observe the process being assessed for risk in action. The members of the risk assessment team will individually document their findings on the “ABC Proactive Risk Assessment Worksheet” (Attachment A). To determine the appropriate score for each identified risk, the reviewer will consider information obtained through a physical tour of the facility, review of annual incident

3.4 Summarise the types of risks that may be involved in assessment in own area of responsibility

Evaluating the Reasonableness of the Accounting Estimates, and Determining Misstatements: the auditor shall evaluate, based on the audit evidence, whether the accounting estimates in the financial statements are either

Elder, A. A., Beasley, M., & Elder, R. J. (2014). Auditing and assurance services (15th ed.). Upper Saddle River, NJ: Pearson.

Arens, A. A., Elder, R. J., & Beasley, M. S. (2013). Auditing and Assurance Services. Old Tappan, NJ: Pearson Education.

In Part I of the case, you performed preliminary analytical procedures for Pinnacle (pp. 245–247). The purpose of Part II is to identify factors influencing risks and the relationship of risks to audit evidence.

A review and an audit report are both a form of an attestation engagement. A Review, however, is less in scope so it provides a moderate level of assurance on the financial statements. It is considered a “sniff” of an audit, which comparatively provides reasonable assurance that no material misstatements occurred. Since a review deals with a limited scope, it does not provide the basis for expressing an opinion on the presentation of the

In Part I of the case, you performed preliminary analytical procedures for Pinnacle (pp. 245–247). The purpose of Part II is to identify factors influencing risks and the relationship of risks to audit evidence.

d. “The auditor's reliance on substantive tests to achieve an audit objective related to a particular assertion may be derived from tests of details, from analytical procedures, or from a combination of both. The decision about which procedure or procedures to use to achieve a particular audit objective is based on the auditor's judgment on the expected effectiveness and efficiency of the available procedures. For significant risks of material misstatement, it is unlikely that audit evidence obtained from substantive analytical procedures alone will be sufficient (PCAOB, AS 2305.09).”