Audit Risk


Also found in: Wikipedia.

Audit Risk

The risk to a company or investor that an audit will not discover some accidental or intentional irregularity, either through negligence or mal intent. This may result in significant losses to the company and its investors once the irregularity is finally discovered. It could also result in a lawsuit against the auditing firm that conducted the audit.
References in periodicals archive ?
To date, the position of the Service and of professional organizations has been that tax return preparers cannot take into account audit risk in evaluating the merits of a return position.
Businesses can streamline their Audit Risk policy systems and empower the auditors to create, store and distribute crucial information to the right employees on cloud.
The meeting debates several topics including the concept and nature of relative importance and audit risk when designing audit programmes.
As Exhibit 2 shows, the documentation of an auditor's understanding, including internal controls, becomes a critical input into the application of the audit risk model and the assessment of the risk of material misstatements.
Our paper is structured in three main chapters and proposes an improved audit model based on sampling that diminueshes the audit risk.
Peer review season is in high gear and there are lessons to be learned about implementing the new audit risk standards.
The proposed standards would supersede the Board's interim auditing standards related to audit risk and materiality, audit planning and supervision, consideration of internal control in an audit of financial statements, audit evidence, and performing tests of accounts and disclosures before year end.
Related resources include a new self-study course, as well as an audit risk alert and an audit and accounting guide.
Engagement risk is considered to be composed of three components: client's business risk, audit risk, and auditor's business risk.
The eight standards listed here are designed to help auditors plan and perform audit procedures that will address assessed risks, enhance the auditor's response to audit risk and materiality, facilitate planning and supervision and clarify the concept of audit evidence.
The reason this integration is important is that the AvaTax Connect linkage we created allows Sage MAS 500 users to increase efficiency and reduce audit risk, while freeing up their accounting staff to focus on other initiatives," said Danny Baker, Principal of Baker Consulting, in an announcement.
The Pharma ATG does not specifically address the PE requirement (or any other component of the definition of qualified research) but, rather, it assesses the potential audit risk for various drug industry activities likely to be claimed for the credit.