Model of Integrated Estimation of Audit Risk

Abstract

Purpose. This paper goes into detail on the advantages of a risk-based approach to auditing financial statements. Methodology. The authors propose a model of the risk estimation process during an audit, taking into account limitations, and put forth the rationale for developing a model of combined risk estimation during audit proceedings, a description of the methodological foundations of the process, a description of the methodological tools applied. Findings. The authors propose the procedure for estimating the risk of deliberate considerable falsification of accounting reporting. Originality. The model of combined risk estimation during audit proceedings is original. In our opinion, the application of a formal methodological instrument will reap the following benefits: simplification of the procedure of collecting information concerning risks within the audit group before discussing the list of identified risk factors; reduced effort required to identify risks; increased audit efficiency, performed on the basis of the risk-oriented approach; coverage of all features confirming the risk of considerable falsification of accounting reporting; a greater level of preparedness among the audit group to discuss considerable falsification risk factors affecting accounting reporting undergoing audit proceedings.

DOI: 10.5901/mjss.2015.v6n3s6p241