What is the difference and relation between Business risk Inherent risk Control risk Detection...
In risk based audit engagements understanding different kinds of risk become extremely important. Proper understand will not only differentiate between different kinds of risks but also help you in recognizing the duties of management...
What is Audit risk?
In IAASB auditing standards the term Audit risk has been defined as:
The risk that auditor expresses an inappropriate audit opinion when the financial statements are materially misstated. Audit risk is a function of risk...
What is the difference between Audit evidence and Audit procedure?
Auditor's responsibility is to express opinion on the assertions expressed by the management in the financial statements. However, to be reasonably sure that his opinion is appropriate, auditor is required to obtain sufficient appropriate...
What is the difference between Audit engagement and Assurance engagement?
In few words, all audit engagements are assurance engagements but not all assurance engagements are audit engagements. Audit engagement is one type of assurance engagement that provides reasonable assurance. Assurance engagements can be reasonable...
What is the difference between Inherent Risk and Business Risk and implications of these...
Understanding the difference between these two terms and other risk related terminologies is vital if students want to acquire the conceptual understanding of the Risk-based Audit approach.
According to the glossary accompanying the...
What is Control risk?
Control risk has been defined under International Standards of Auditing (ISAs) as following:
The risk that a misstatement that could occur in an assertion about a class of transaction, account balance or disclosure and that...
What is an Assurance engagement in auditing?
Assurance engagement is an engagement performed by a practitioner to enable himself to express an opinion about the measurement of subject matter against a criteria. Practitioner's expression of opinion raise the confidence of the users over...
What is tolerable misstatement and tolerable rate of deviation and the difference betweem them?
Auditor most of the time, due to number of factors, is unable to apply audit procedures on each and every piece of information available to him. Therefore, he applies different audit procedures on less...
What is Other Matter paragraph and when is it used?
Other matter paragraph is an additional paragraph which auditor might add if in his eyes it is important to draw attention of user to a matter other than those disclosed or presented in the...
What is meant by threats to Fundamental ethical principles in auditing?
To bound auditors around the world to achieve objectives of engagement effectively and also providing users of financial statements with reasonable assurance and making them responsible for other aspects of the profession auditors have...