Response to Audit Risk

Question 1

Response to Audit Risk

Answer 1

• Types of enquiries auditors should make
• Information/documentation needed
• Correspondence they should review
• Impact on materiality level
• Type of testing they should perform
• Calculations they would do/re-perform
• Assets they should inspect

Question 2

Responses to audit risk (fraud)

Answer 2

• Assign & supervise audit staff taking into consideration their knowledge, skill & ability
• Evaluate whether the client’s acctg policies may indicate fraudulent financial statements
• Incorporate unpredictability in the selection of nature, timing & extent of audit procedures