Finding the balance between the assessed risk and work performed in an audit is an art that many times is done in an overkill manner. It does not have to be this way. This introductory course helps an auditor, whether first year or an experienced senior, to better understand the risk assessment process, and how that ties to the requirements for appropriately performing procedures linked to the assessed level of risk. We explore the different levels of assessed risk, and how to recognize if you have appropriate substantive audit procedures.
This course touches upon the risk assessment, and how the identification of immaterial, significant accounts and RMM accounts and classes of transactions determines work performed. This course discusses the linkage between the risk areas, their related assertions, and the substantive procedures performed.
Course Key Concept: Audit, Risk Assessment, RMM, Material Misstatement, Significant Account, Materiality, Substantive Procedures, Immaterial, CPA, Audit Efficiency. Target Audience: Beginner (Intern or First Year) to 3 Year experienced Senior Auditor.
Learning Objectives
- Explore risk assessment.
- Identify immaterial, material and RMM accounts.
- Recognize the requirements for testing material accounts.
- Explore the linkage between extent of procedures and risk assessment.
- Discover the requirements for testing RMM accounts.
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Prerequisites
No advanced preparation or prerequisites are required for this course.
Education Provider Information
Course Questions and Answers1 Question
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Hi Tyler,
thank you for an excellent course.
RMM = IR x CR. If the risk scale is Medium, Low and High, is determining the RMM pure mathematics after you have rated the IR and CR.
Let's assume the CR is high, and IR low, is there a RMM? And furthermore, when does RMM become a signficant risk: is it only when both IR and CR are high?
Should CR always high already at this stage, even though there were e.g. a good entity level control environment, or can it be lower even though key controls will not be tested later in the audit process.
Thanks,
Marko