The Risk-Based Audit: Overview

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The auditor’s overall objectives, as stated in ISA 200.11, can be summarised as follows:

  • To obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, thereby enabling the auditor to express an opinion on whether the financial statements are prepared, in all material respects, under an applicable financial reporting framework; and
  • To report on the financial statements and communicate as required by the ISAs, following the auditor’s findings.

Reasonable Assurance

Reasonable assurance is a high but not absolute level of assurance. It is obtained when the auditor has obtained sufficient appropriate audit evidence to reduce audit risk (that is, the risk that the auditor expresses an inappropriate opinion when the financial statements are materially misstated) to an acceptably low level. The auditor cannot provide absolute assurance due to inherent limitations in work. This results from the majority of audit evidence (on which the auditor draws conclusions and bases the auditor’s opinion) being persuasive rather than conclusive.


  • 合理保证财务报表整体上不存在由于欺诈或错误造成的重大错报,从而使审计师能够对财务报表是否在所有重大方面根据适用的财务报告框架编制发表意见;以及
  • 按照《国际审计准则》的要求,在审计员的审计结果出来后,对财务报表进行报告和沟通。




Inherent Limitations of an Audit

1. The Nature of Financial Reporting

The preparation of financial statements involves:

  1. Judgment by management in preparing the financial statements and applying the presentation and disclosure requirements in the applicable financial reporting framework; and
  2. Subjective decisions or assessments (such as estimates) by management involve a range of acceptable interpretations or judgments.

2. Nature of Audit Evidence Available

Most of the auditor’s work in forming the auditor’s opinion consists of obtaining and evaluating audit evidence. This evidence tends to be persuasive in character rather than conclusive.

Audit evidence is primarily obtained from audit procedures performed during the course of the audit. It may also include information obtained from other sources such as:

  • Previous audits;
  • A firm’s quality control procedures for client acceptance and continuance;
  • The entity’s accounting records; and
  • Audit evidence prepared by an expert employed or engaged by the entity

3. The Nature of Audit Procedures

Audit procedures, however well-designed, will not detect every misstatement. Consider the following:

  • Any sample of less than 100% of a population introduces some risk that a misstatement will not be detected;
  • Management or others may not provide, intentionally or unintentionally, the complete information required. Fraud may involve sophisticated and carefully organised schemes designed to conceal it; and
  • Audit procedures used to gather audit evidence may not detect that some information is missing.

4. Timeliness of Financial Reporting

The relevance/value of financial information tends to diminish over time, so a balance must be struck between the information’s reliability and cost.

Users of financial statements expect that the auditor will form his or her opinion within a reasonable period of time and at a reasonable cost. Consequently, it is impracticable to address all information that may exist or to pursue every matter exhaustively on the assumption that information is in error or fraudulent until proven otherwise.


1. 财务报告的性质


  • 管理层在编制财务报表和应用适用的财务报告框架中的表述和披露要求时的判断;以及
  • 管理层的主观决定或评估(如估计)涉及一系列可接受的解释或判断。

2. 现有审计证据的性质



  • 之前的审计。
  • 事务所对客户的接受和持续的质量控制程序。
  • 该实体的会计记录;以及
  • 由该实体雇用或聘请的专家准备的审计证据

3. 审计程序的性质


  • 任何低于100%的样本都会带来一些风险,即错报不会被发现。
  • 管理层或其他人可能有意或无意地不提供所需的完整信息。欺诈可能涉及复杂和精心组织的计划,旨在掩盖它;以及
  • 用于收集审计证据的审计程序可能无法发现某些信息的缺失。

4. 财务报告的及时性



Scope of an Audit

The scope of the auditor’s work and the opinion provided are usually confined to whether the financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework.

As a result, an unmodified auditor’s report does not assure the future viability of the entity nor the efficiency or effectiveness with which management has conducted the affairs of the entity.

Any extension of this basic audit responsibility, such as that required by local laws or securities regulations, would require the auditor to undertake further work and modify or expand the auditor’s report accordingly.

Material Misstatements

A material misstatement (either individually or the aggregate of all uncorrected misstatements and missing/misleading disclosures in the financial statements) has occurred when it could reasonably be expected to influence the economic decisions of users made based on the financial statements.


Assertions are representations by management, explicit or otherwise, that are embodied in the financial statements. They relate to the recognition, measurement and presentation of classes of transactions and events, account balances and disclosures in the financial statements. For example, the completeness assertion relates to all transactions and events that should have been recorded having been recorded. They are used by the auditor to consider the potential misstatements that may occur.









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