PPT: Risk Assessment and Internal Control | Auditing and Ethics for CA Intermediate PDF Download

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Page 2


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Learning objectives
1. Appreciate the importance of audit risk assessment and 
why it is linked to financial statement assertions. 
2. Explain the importance of business risks in audit 
planning.
3. Describe the procedures performed by an auditor to 
assess risk.
4. Appreciate the importance of internal control to an 
entity and to its independent auditors. 
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Page 3


1
Learning objectives
1. Appreciate the importance of audit risk assessment and 
why it is linked to financial statement assertions. 
2. Explain the importance of business risks in audit 
planning.
3. Describe the procedures performed by an auditor to 
assess risk.
4. Appreciate the importance of internal control to an 
entity and to its independent auditors. 
2
Learning objectives
5. Indicate the procedures for obtaining and documenting 
an understanding of the entity’s internal control.
6. Explain why and how a preliminary assessment of 
control risk is made.
7. Explain the importance of the concept of audit risk and 
its three components.
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Page 4


1
Learning objectives
1. Appreciate the importance of audit risk assessment and 
why it is linked to financial statement assertions. 
2. Explain the importance of business risks in audit 
planning.
3. Describe the procedures performed by an auditor to 
assess risk.
4. Appreciate the importance of internal control to an 
entity and to its independent auditors. 
2
Learning objectives
5. Indicate the procedures for obtaining and documenting 
an understanding of the entity’s internal control.
6. Explain why and how a preliminary assessment of 
control risk is made.
7. Explain the importance of the concept of audit risk and 
its three components.
3
Management’s financial 
statement assertions
Existence or occurrence
Assets or liabilities of the entity exist at a given date 
and whether recorded transactions or events have 
occurred during the period.
Completeness
Transactions, events and accounts that should be 
presented in the financial statement are included.
Cut-off
All transactions, events and accounts have been 
recorded in the correct period.
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Page 5


1
Learning objectives
1. Appreciate the importance of audit risk assessment and 
why it is linked to financial statement assertions. 
2. Explain the importance of business risks in audit 
planning.
3. Describe the procedures performed by an auditor to 
assess risk.
4. Appreciate the importance of internal control to an 
entity and to its independent auditors. 
2
Learning objectives
5. Indicate the procedures for obtaining and documenting 
an understanding of the entity’s internal control.
6. Explain why and how a preliminary assessment of 
control risk is made.
7. Explain the importance of the concept of audit risk and 
its three components.
3
Management’s financial 
statement assertions
Existence or occurrence
Assets or liabilities of the entity exist at a given date 
and whether recorded transactions or events have 
occurred during the period.
Completeness
Transactions, events and accounts that should be 
presented in the financial statement are included.
Cut-off
All transactions, events and accounts have been 
recorded in the correct period.
4
Management’s financial 
statement assertions
Rights and obligations
Assets represent rights of the entity and liabilities 
are the obligations of the entity at a given date.
Valuation and allocation
Asset, liability, components have been included in the 
financial statements at the appropriate amounts.
Accuracy
Transactions have been appropriately recorded 
in the proper accounts.
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