Identify the objectives of audit risk assessment; its importance in assessing the occurrence of fraud; and the influence of the assessment on evaluation of ICFR.

Question

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Answer 1

Question

Chapter 5, Problem 1DQ

To determine

Identify the objectives of audit risk assessment; its importance in assessing the occurrence of fraud; and the influence of the assessment on evaluation of ICFR.

Expert Solution & Answer

Explanation of Solution

Risk assessment refers to the estimation of the possibility of the adverse conditions. It may be considered as the analysis of “What is the worst that can happen”. The risk assessment must be carried on based on the ethical tone of the top management, misstatements, frauds and errors. The major objective of risk assessment is to scrutinize the weakest links in the financial reporting controls.

The importance of risk assessment includes the strengthening of the internal control, which reduces the opportunity for fraud. Risk assessment identifies the internal control deficiencies and the sensitive areas of the audit.

The risk assessment enables the auditor to find the material misstatements. This enables the auditor to perform the audit in a more efficient and effective manner.

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Answer 2

Question

Chapter 5, Problem 1DQ

To determine

Identify the objectives of audit risk assessment; its importance in assessing the occurrence of fraud; and the influence of the assessment on evaluation of ICFR.

Expert Solution & Answer

Explanation of Solution

Risk assessment refers to the estimation of the possibility of the adverse conditions. It may be considered as the analysis of “What is the worst that can happen”. The risk assessment must be carried on based on the ethical tone of the top management, misstatements, frauds and errors. The major objective of risk assessment is to scrutinize the weakest links in the financial reporting controls.

The importance of risk assessment includes the strengthening of the internal control, which reduces the opportunity for fraud. Risk assessment identifies the internal control deficiencies and the sensitive areas of the audit.

The risk assessment enables the auditor to find the material misstatements. This enables the auditor to perform the audit in a more efficient and effective manner.

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Answer 3

Question

Chapter 5, Problem 1DQ

To determine

Identify the objectives of audit risk assessment; its importance in assessing the occurrence of fraud; and the influence of the assessment on evaluation of ICFR.

Expert Solution & Answer

Explanation of Solution

Risk assessment refers to the estimation of the possibility of the adverse conditions. It may be considered as the analysis of “What is the worst that can happen”. The risk assessment must be carried on based on the ethical tone of the top management, misstatements, frauds and errors. The major objective of risk assessment is to scrutinize the weakest links in the financial reporting controls.

The importance of risk assessment includes the strengthening of the internal control, which reduces the opportunity for fraud. Risk assessment identifies the internal control deficiencies and the sensitive areas of the audit.

The risk assessment enables the auditor to find the material misstatements. This enables the auditor to perform the audit in a more efficient and effective manner.

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Answer 4

Question

Chapter 5, Problem 1DQ

To determine

Identify the objectives of audit risk assessment; its importance in assessing the occurrence of fraud; and the influence of the assessment on evaluation of ICFR.

Expert Solution & Answer

Explanation of Solution

Risk assessment refers to the estimation of the possibility of the adverse conditions. It may be considered as the analysis of “What is the worst that can happen”. The risk assessment must be carried on based on the ethical tone of the top management, misstatements, frauds and errors. The major objective of risk assessment is to scrutinize the weakest links in the financial reporting controls.

The importance of risk assessment includes the strengthening of the internal control, which reduces the opportunity for fraud. Risk assessment identifies the internal control deficiencies and the sensitive areas of the audit.

The risk assessment enables the auditor to find the material misstatements. This enables the auditor to perform the audit in a more efficient and effective manner.

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Answer 5

Chapter 5, Problem 1DQ

To determine

Identify the objectives of audit risk assessment; its importance in assessing the occurrence of fraud; and the influence of the assessment on evaluation of ICFR.

Expert Solution & Answer

Explanation of Solution

Risk assessment refers to the estimation of the possibility of the adverse conditions. It may be considered as the analysis of “What is the worst that can happen”. The risk assessment must be carried on based on the ethical tone of the top management, misstatements, frauds and errors. The major objective of risk assessment is to scrutinize the weakest links in the financial reporting controls.

The importance of risk assessment includes the strengthening of the internal control, which reduces the opportunity for fraud. Risk assessment identifies the internal control deficiencies and the sensitive areas of the audit.

The risk assessment enables the auditor to find the material misstatements. This enables the auditor to perform the audit in a more efficient and effective manner.

Answer 6

Chapter 5, Problem 1DQ

To determine

Identify the objectives of audit risk assessment; its importance in assessing the occurrence of fraud; and the influence of the assessment on evaluation of ICFR.

Expert Solution & Answer

Explanation of Solution

Risk assessment refers to the estimation of the possibility of the adverse conditions. It may be considered as the analysis of “What is the worst that can happen”. The risk assessment must be carried on based on the ethical tone of the top management, misstatements, frauds and errors. The major objective of risk assessment is to scrutinize the weakest links in the financial reporting controls.

The importance of risk assessment includes the strengthening of the internal control, which reduces the opportunity for fraud. Risk assessment identifies the internal control deficiencies and the sensitive areas of the audit.

The risk assessment enables the auditor to find the material misstatements. This enables the auditor to perform the audit in a more efficient and effective manner.

Answer 7

Chapter 5, Problem 1DQ

To determine

Identify the objectives of audit risk assessment; its importance in assessing the occurrence of fraud; and the influence of the assessment on evaluation of ICFR.

Answer 8

Expert Solution & Answer

Explanation of Solution

Risk assessment refers to the estimation of the possibility of the adverse conditions. It may be considered as the analysis of “What is the worst that can happen”. The risk assessment must be carried on based on the ethical tone of the top management, misstatements, frauds and errors. The major objective of risk assessment is to scrutinize the weakest links in the financial reporting controls.

The importance of risk assessment includes the strengthening of the internal control, which reduces the opportunity for fraud. Risk assessment identifies the internal control deficiencies and the sensitive areas of the audit.

The risk assessment enables the auditor to find the material misstatements. This enables the auditor to perform the audit in a more efficient and effective manner.