Risk Assessment Objective

Question 1

Objective of risk assessment?

Answer 1

Identifying and assess the risks of material misstatement, whether due to fraud or error, at the financial statement and assertion levels

Question 2

Objective of risk assessment provides a basis for?

Answer 2

Designing and implementing responses to the assessed risks of material misstatement

Question 3

What does the auditor first identify?

Answer 3

The risks and then assesses their severity

Question 4

What does assessing the severity allows them to do?

Answer 4

Design responses to the risks in accordance with ISA 330

Question 5

What must the auditor understand?

Answer 5

The entity to perform an adequate risk assessment

Question 6

What does ISA 315 consider?

Answer 6

The risk assessment itself to be part of the audit evidence

Question 7

What do risk assessment procedures include (I)

Answer 7

Inquiries of management

Question 8

What do risk assessment procedures include (A)

Answer 8

Analytical procedures

Question 9

What do risk assessment procedures include (O)

Answer 9

Observation and inspection

Question 10

What informaiton may use the auditor use?

Answer 10

Information from last year’s audit, but this must be evaluated to consider whether it remains relevant and appropriate this year