The Audit Risk Formula

Description

The Audit Risk Formula includes a self-study e-book delivered to you immediately upon purchase for 3.5 hours of CPE credit.

As an auditor, you need to know how to assess risk and choose relevant evidence but also how to justify your choices! The AICPA has promulgated a significant amount of guidance and terminology regarding evidence- even going as far as to lay out a quasi-mathematical audit risk formula (ever heard of AR=DR x CR x IR?) – all in an effort to help auditors document their decisions and assess strength of their evidence.

Professor Jim Crockett explains the terms and concepts surrounding the AICPA’s evidence standards and audit risk formula to you in this short text. He begins by outlining a general theory of evidence and how evidence is used by various disciplines. Next Professor Crockett explains audit procedures appropriate for securing evidence and the weights that should be assigned to the various types of evidence. This base of knowledge allows the Professor to explain the evidence terminology and formulas promulgated by the AICPA.

This course is designed to give auditors an in-depth understanding of how auditee assertions, audit objectives, audit risks, internal controls, and the attributes of different forms of evidence affect an auditor’s decisions about how to secure and evaluate audit evidence.

Course objectives include:

• Recognize evidence per audit standards
• Cite the requirements of audit evidence to the evidence requirements associated with other professions and several audit standard-setting bodies
• Identify sufficient and appropriate evidence
• Identify options for gathering audit evidence
• Identify the components and relationship of the components of the audit risk model
• Determine whether evidence is sufficient and appropriate
• Identify the relationship of an audit objective to audit procedures
• Identify standards for documenting audit evidence
• Identify evidence-related requirements associated with potential fraud
• Distinguish review evidence from audit evidence

CPE credit: 3.5 hours
NASBA Category of Study: Auditing – Governmental
Program level: Basic
Prerequisites: None
Advance preparation: None
Who should attend: Auditors of government programs.
Instructional method: Self-study text with online quiz. QAS SS
Author: Professor James R. (Jim) Crockett, DBA, CPA. (Ret.)

Questions? You can find our FAQ here.