Audit

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Detection Risk

Detection risk is the risk that an auditor fails to detect material misstatement in the financial statements being audited. There is always some amount of detection risk in an audit engagement due to limitations of the audit process. However, ...

Audit Risk Model

Audit risk model is a tool used by auditors to understand the relationship between various risks arising from an audit engagement enabling them to manage the overall audit risk. Audit risk model suggests that overall audit risk of an engagement is the product of the following three component risks ...

Risk of Material Misstatement

Risk of material misstatement is the risk that any misstatements that exist in the financial statements being audited, could be material either individually or in aggregate.

Business Risk

Business risk is an event, circumstance or condition that may result in an organization failing to achieve its objectives or adversely affect its strategy.

Hot vs Cold Review

In audit, hot and cold reviews are two different types of engagement reviews both with the aim to improve the quality of work done. However, both test different aspects of quality control.

Expectation Gap

Expectation gap is the difference between general public’s perception of an auditor’s role and responsibilities regarding audit engagements and what auditor’s legal responsibilities actually are.

Analytical Procedures

Analytical procedures are auditing procedures that involve analysis of relationship between financial and non-financial data.

Agreed-upon Procedures

Agreed-upon procedures engagement is a project in which the auditor, the client and/or any third party have agreed that the auditor will carry out certain procedures and report the details to the client and/or the third party.

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