Audit procedures for assessing the risks of misstatement of an organization’s financial statements

Risk assessment is an integral stage during the audit of financial statements (FS) of the commercial enterprise. Procedures performed by auditors during this stage are aimed at forming an effective audit strategy, identifying the areas (specifically - classes of transactions, account balances and FS disclosures, etc.) most susceptible to the risk of misstatement, and determining the nature, characteristics, timing and scope of further audit procedures necessary to obtain sufficient appropriate audit evidence to form an appropriate audit opinion. This stage of the audit can have a significant impact on the audited entity's operations, as, in order to maintain an appropriate level of effectiveness, the organization's management must regularly evaluate contradictory information, including from regulatory authorities, to respond to identified business risks. The article discloses the main objectives of audit procedures for assessing the risks of misstatement of financial statements, as well as the procedures themselves, including - what information the auditors analyze at this stage of the audit, what communications with the management of the audited organization are made, as well as considers approaches to determining the level of materiality and is designed to contribute to a detailed understanding by commercial organizations of the procedures carried out by auditors.