Risk Assessment Process

Question 1

Risk assessment

Answer 1

Here are the simplified smart notes:

ISA 315 (Revised 2019) Risk Assessment Procedures

Required Procedures:

1. Inquiries:
   Auditor should ask questions from
   
   • Management
   • Internal audit team (if exists)
   • Others informed party
     To gather insight on internal control and potential risk
2. Analytical Procedures:
   
   • Identify unusual transactions or events
   • Analyze amounts, ratios, and trends
   • Identify potential audit implications
3. Observation and Inspection:
   
   • Support inquiries and provide additional information
   • Observe entity’s operations, internal controls, and premises

Use of Automated Tools and Techniques:

• Perform risk assessment procedures on large data volumes
• Analyze, recalculate, reperform, or reconcile data