Chapter 6 Audit risks and Audit planning - Summary

1. Audit risk
2. Professional scepticism - questioning mind, being alert to conditions, critical assessment
3. Risk analysis
4. FS assertions - UR COCO CAVE
5. Audit risk components & business risk
6. Materiality : quantitative and qualitative
SOFP - 1%-2% ; Revenues - 2% ; PBT - 5%-10%
7. Performance materiality
8. Understand entity & its environment ; how to understand?
9. Audit strategy : UUR CCO
10. Identify & assess the risks: identify, relate(assertions - UR COCO CAVE), magnitude, likelihood
11. Audit plan: IPP AEE
12. What to do on identified material audit risk?
13. Fraud ( prevention IA/responsibilities EA)
14, Auditors' visits (Interim audit / final audit)