ASSESSMENT OF ENVIRONMENTAL AND MATERIAL MISSTATEMENT RISK AT THE PRECONDITIONS LEVEL

Abstract

© 2020. All Rights Reserved. This paper discusses some problems relating to assessment of environmental and material misstatement risk. The paper begins with a short discussion about different methods of audit risk and risk of material misstatement assessment. For that the authors describe definitions of audit risk components, such as inherent risk, control risk and risk of material misstatement. Besides that, the authors point out some methods of its assessments given by domestic and foreign scientists. Then the authors go on to the problems of modern and widespread audit risk assessment in audit practice. For the decision of revealed problems, the universal model for evaluating the hazards of material misstatement at the prerequisite level are proposed to introduce. This model is presented into three modifications. The final paragraph ends with consideration of different situations about how the auditor can use the supposed model of material misstatement risk assessment according to various level of internal control system efficiency.