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Track 2 of 19 · Core

Risk assessment under SAS 145

How AU-C 315 as amended by SAS 145 asks the auditor to identify and assess the risks of material misstatement: the spectrum of inherent risk, significant risks, relevant assertions, the system of internal control, IT general controls and the stand-back. Fraud risk under AU-C 240 is covered alongside.

12 lessonsAbout 48 minAU-C 315 · AU-C 240 · AU-C 330 · SAS 145
0 of 12 complete
Syllabus

For: Seniors and in-charges who plan engagements, and staff who document the risk assessment.

  1. 01What SAS 145 changed and when it took effectThe main changes SAS 145 made to AU-C 315 and AU-C 330, its effective date, and the old habits that no longer pass review in a risk assessment file.4 min · worked example · 4 self-check questions
  2. 02Understanding the entity, its environment and the reporting frameworkWhat AU-C 315.19 requires you to understand about the entity, its environment and accounting policies, and the risk assessment procedures that get you there.4 min · worked example · 3 self-check questions
  3. 03Inherent risk factors and the spectrum of inherent riskHow to assess inherent risk by likelihood and magnitude using the five inherent risk factors, and how to place each risk on the spectrum and document why.4 min · worked example · 3 self-check questions
  4. 04Significant risks: definition, determination and required responsesThe SAS 145 definition of a significant risk, which risks are significant by rule, and the specific responses AU-C 315 and AU-C 330 require for each one.4 min · worked example · 4 self-check questions
  5. 05Significant classes, balances, disclosures and relevant assertionsHow to determine relevant assertions and significant classes of transactions, account balances and disclosures, and why they set the floor for substantive work.4 min · worked example · 4 self-check questions
  6. 06Assessing control risk: maximum unless you testWhy AU-C 315.38 sets control risk at maximum unless you plan to test operating effectiveness, and how a planned control reliance strategy changes your procedures.4 min · worked example · 3 self-check questions
  7. 07The system of internal control and its five componentsThe five components of internal control in AU-C 315, what you must understand and evaluate for each, and how indirect components affect your risk assessment.4 min · worked example · 3 self-check questions
  8. 08Identified controls and evaluating design and implementationWhich controls AU-C 315.27 requires you to identify, how to evaluate design and determine implementation, and why inquiry alone never meets AU-C 315.30.4 min · worked example · 3 self-check questions
  9. 09The IT environment and general IT controls under SAS 145How to identify IT applications, risks arising from IT and the general IT controls that address them, scaled for both small and complex IT environments.4 min · worked example · 3 self-check questions
  10. 10Fraud risk and the engagement team discussion (AU-C 240)How the engagement team discussion, required fraud inquiries, the revenue recognition presumption and management override procedures fit into SAS 145 risk assessment.4 min · worked example · 4 self-check questions
  11. 11The stand-back requirement and linking risks to responses (AU-C 330)How the AU-C 315.40 stand-back and AU-C 330.18 work together, and how to design responses whose nature, timing and extent link to each assessed risk.4 min · worked example · 4 self-check questions
  12. 12Documenting the risk assessment so it survives reviewWhat AU-C 315.42 requires you to document, how to structure a risk assessment file, and the documentation gaps peer reviewers find most often under SAS 145.4 min · worked example · 3 self-check questions
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