The financial statement audit, commonly referred to as the attest function, involves (1) examination of financial statements through the gathering of sufficient appropriate evidence and (2) expression of an opinion on the fairness of the presentation of the financial statements in conformity with generally accepted accounting principles (GAAP) or other comprehensive basis of accounting.
In planning a financial statement audit, the practitioner needs to develop an overall strategy for performing:
This strategy must be documented in the audit work papers.
Risk Assessment Procedures
What are risk assessment procedures?
Risk assessment procedures are procedures performed by an auditor to obtain an understanding of the entity and its environment, including its internal control.
Must risk assessment procedures be performed separately from other audit procedures?
Risk assessment procedures can be performed concurrently with tests of controls and substantive procedures.
What are the types of risk assessment procedures?
Risk assessment procedures include: