This CPE course will explain the audit risk model and discuss how it is used at the onset of and throughout the audit process.
The audit risk model has a long history in auditing. Its importance has been heightened recently by efforts to assess the quality of audits and determine the sufficiency of audit procedures to achieve a low risk that a material misstatement might exist and be missed by the auditor during the audit process. The audit risk model is a tool that can help peer reviewers and inspectors determine the sufficiency of procedures performed. Engagement teams can do a better job of documenting their work when they consider the structure of the audit risk model and how evidence regarding procedures and findings is tabulated.