In this CPE course, we will be taking a deeper dive into the inherent risk and control risk assessment tasks, with an emphasis on what these tasks seek to accomplish and how those tasks drive the overall audit process. Individual firms may use commercial or self-developed templates to document the assessments and procedures performed and evidence examined during this phase of the audit. However, without an understanding of the purpose and importance of these tasks, the mechanics of completing documentation forms can obscure the real purpose of the tasks required when performing an audit.
This dynamic, in-depth course tackles a large body of knowledge in the module and will be completed in three sections. First, we will set the stage for the risk assessment in providing some reminders of the importance of setting a materiality target for the engagement and how the audit strategy, executed by account and relevant assertion, relates to the fundamental inherent and control risk assessments. Next, we will delve into the risk assessment, or inherent risk assessment task, emphasizing and distinguishing entity and auditor tasks and how to properly support with documentation these risk assessments that will drive further audit procedures. Finally, we will review and take a deeper dive into the COSO framework, which is the basis for most systems of internal control assessments.