Audit Risk

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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 ?
This article argues that the Treasury Department and professional organizations should make it clear that tax return preparers may make full disclosure of Service audit risks to the extent this information is known.
Auditors must develop audit plans in which they document the audit procedures that are expected to reduce the audit risks to acceptably low levels.
I posit that auditors' knowledge of the client's industry positively affects auditors' ability to assess audit risks.
The purpose of this study is to assess empirically whether component audit risks are assessed independently or are assessed interdependently and conditionally (i.
In order to identify audit risks, the accountant should evaluate closely management's understanding of the accountant's responsibilities and prior audit history, the reasons for changing accounting firms, management's integrity, the technical ability of the accounting firm to serve the client, the accounting firm's "independence" and any other special circumstances.
47, Audit Risks and Materiality in Conducting an Audit, provides guidance on the auditor's consideration of audit risk and materiality when planning or performing an audit.