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presenter: fahhad and khalid
presenter: fahhad and khalid
O `hat is Risk
O `hat is Audit
O `hat is Audit Risk
O Audit Risk Model
O Inherent Risk
Components
O Control risk
Components
O Detection risk
Components
O General Questions
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presenter: fahhad and khalid
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O
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presenter: fahhad and khalid
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presenter: fahhad and khalid
Audit risk
O The risk that the
auditor gives an
inappropriate audit
opinion when the
financial report is
materially
misstated
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O The risk of material
misstatements absent any
internal controls or testing
O The first filter of the audit
risk is inherent risk which is
due to the management,
accountant, or due to the
company
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presenter: fahhad and khalid
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O Gigher in complex transactions
O Ú
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presenter: fahhad and khalid
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ë O Depends on the design and
execution of controls
O Audit Risk = risk that internal
controls will FAIL to prevent or
detect misstatement
Gigh CR means high risk
controls will fail
Low CR means low risk controls
will fail
O If CR is high, auditor will not rely
much on controls
O If CR is low, auditor can rely on
ICS and reduce other types of
testing
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presenter: fahhad and khalid
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presenter: fahhad and khalid
ë O A function of the types of
tests the auditor does
O Remember nature, timing, and
extent
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presenter: fahhad and khalid
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presenter: fahhad and khalid
Question # 1:
The probable deviation in expected results is called?
A: Inherent risk
B: Control risk
C: Risk
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presenter: fahhad and khalid
Question # 1:
The risk that the auditor gives an inappropriate audit
opinion when the financial report is materially misstated?
A: Audit risk
B: Control risk
C: Risk
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presenter: fahhad and khalid
Question # :
Gow many types of risk in audit risk model?
A: types
B: 3 types
C: ¦ types
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presenter: fahhad and khalid
Question # :
The risk that internal controls will fail to prevent or
detect material misstatement is called?
A: Inherent risk
B: Control risk
C: Detection risk
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presenter: fahhad and khalid
Question # 1:
The risk associated with the auditor and on which audit
report depend is called?
A: Inherent risk
B: Control risk
C: Detection risk
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presenter: fahhad and khalid
Ú
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