The Auditors' Preferences Affecting Factors on Inherent Risk in the Account Remaining Sum Level and Financial Statements Level

Subject Areas :

Zohreh Hajiha ¹

1 - استادیار دانشگاه آزاد اسلامی واحد تهران شرق(قیام دشت)

Received: 2015-05-09 Accepted : 2015-05-09 Published : 2013-02-19

Keywords: Audit Risk Model, Inherent Risk, Financial Statement Level, Account Remaining Sum Level and Financial Statements Level,

Abstract :

Precise inherent risk assessment is one of important steps for audit risk assessment level by independent auditors that causes to increasing detection risk in an audit and presenting correct audit opinion in risk based audit. The audit risk assessment can affect audit planning, audit strategies as well as final results. Auditing standards propose inherent risk assessment into two levels of overall financial statements and detailed way of account balances. However, the basic question is when assessing inherent risk, to auditors these two levels are independent or not? Since this relation influences directly on inherent risk assessment of auditee by auditors and finally it will affects detection risk assessment. In order to this, this research investigates the relationship of two levels of inherent risk. The statistical sample of the research consists of auditors of Iranian Association of Certified Public Accountants(IACPA) who were ed randomly and by questionnaire instrument researcher measured the significance of each affecting factor on the levels of inherent risk. Research results indicate that there is positive correlation between elements affecting on inherent levels. However, this correlation is rather weak, there is significant difference between affecting factors on these two levels of inherent risk auditors' view point. In the mean time, in Iranian professional environment, auditors prefer account remaining sum level to financial statements level for assessing inherent risk. The results can help independent auditors recognize affecting factors on inherent risk in both levels and pay attention to the relationship between these factors in Iranian audit environment.

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