Study Regarding the Need to Develop an Audit Risk Model
Author:
Associate Prof. Daniel BOTEZ, Ph.D.
JEL:
M42
DOI:
Keywords:
risk audit model, inherent risk, control risk, detection risk, business risk
Abstract:
Auditor’s investigations in missions of audit of the financial statements are planned according to professional standards and reference guides. An essential step in planning is to establish the audit risk by evaluating its components: inherent risk, control risk and detection risk. This involves the application of an audit risk model in order to highlights the criteria for assessing these risks and interdependencies between them.\r\nThe specialized literature brings into forefront, regarding the components of a model of risk, other risks, such as: business risk, the risk of the audit engagement and the significant risks.\r\nAll these aspects are the subject of the present study, which was based on professional standards and guidelines in the field, and on several reference works from specialized literature.\r\nThe study concludes that auditors cannot achieve the objective of an audit mission of financial statements and of assurance, if it does not elaborate or does not involve an audit risk model, if they do not know the evaluation criteria of the components of this model, seeing the relationship between them and if they do not identify a typology and assess other risks, that support understanding the entity and the audit risk.\r\n \r\n