27 Risk assessment and Response With Example
Description
Audit evidence to draw reasonable conclusions on which to base the auditor’s opinion is obtained by performing:
(a) Risk assessment procedures; and
(b) Further audit procedures, which comprise:
* Test of controls, when required by the SAs or when the auditor has chosen to do so; and
* Substantive procedures, including tests of details and substantive analytical procedures.
Risk assessment procedures refer to the audit procedures performed to obtain an understanding of the entity and its environment, including the entity’s internal control, to identify and assess the risks of material misstatement, whether due to fraud or error, at the financial statement and assertion levels.
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