2/19/25 ACCT 4290 – Auditing Smith
Chapter 4
Learning objectives 4 & 5
Auditors perform risk assessment procedures to obtain an understanding of
the entity and its environment.
Helps the auditor identify business risks and understand potential
misstatements
Perform risk assessment procedures:
Inquiries of management and others
Analytical procedures, including audit data
analytics
Observation or inspection to obtain an
understanding of the entity and its
Selection and Industry, Entity Entity
System of
Nature of application of regulatory, objectives, performan
internal
the entity accounting & external strategies, & ce
control
principles factors business measures
risks
Identify business risks that may result in
material misstatements in the financial
statements
Evaluate the entity’s risk assessment
process (how management responds) to
those business risks and obtain evidence
of its implementation
Assess the risk of material misstatement
at the financial statement and assertion
levels
Chapter 4
Learning objectives 4 & 5
Auditors perform risk assessment procedures to obtain an understanding of
the entity and its environment.
Helps the auditor identify business risks and understand potential
misstatements
Perform risk assessment procedures:
Inquiries of management and others
Analytical procedures, including audit data
analytics
Observation or inspection to obtain an
understanding of the entity and its
Selection and Industry, Entity Entity
System of
Nature of application of regulatory, objectives, performan
internal
the entity accounting & external strategies, & ce
control
principles factors business measures
risks
Identify business risks that may result in
material misstatements in the financial
statements
Evaluate the entity’s risk assessment
process (how management responds) to
those business risks and obtain evidence
of its implementation
Assess the risk of material misstatement
at the financial statement and assertion
levels
