What are the audit risks?

Audit risks include inherent risks or inspection risks such as operational risks, credit risks and force majeure factors. Moreover, the aforementioned inherent risk refers to the fact that a certain determination may appear in the accounting statements without considering the relevant internal control policies or procedures of the audited entity, resulting in significant misstatement.

legal ground

Article 9 of the Guiding Opinions on Internal Control Auditing

When making an audit plan, a certified public accountant shall consider the following main factors:

(a) the situation of the audited entity's industry, including the degree of industry prosperity, business risks, technological progress, etc. ;

(two) the internal situation of the audited entity, including organizational structure, operating characteristics, capital composition, production and operation processes, staff quality, etc. ;

(3) Recent changes in the operation and internal control of the audited entity;

(four) the integrity, ability and possibility of fraud of the management organ;

(5) The methods and evidence for the management to evaluate the effectiveness of internal control.

(6) Preliminary judgment on factors such as importance and inherent risks related to determining major defects in internal control.

(seven) the nature of specific internal control and its importance in the overall internal control;

(8) Preliminary judgment on the effectiveness of internal control.

(nine) information about the internal control of the audited entity learned from other professional service institutions.