What is the first stage in audit risk assessment?
A)Identification of accounts and related assertions most at risk of material misstatement, referred to as inherent risk
B)Performance of audit procedures to identify transactions and accounts where the risk of material misstatement is lowest
C)Test the existence assertion of recorded inventory
D)Determination of the effectiveness of the client's system of internal controls

Question

Quizplus · Accepted Answer

The first stage in audit risk assessment involves identifying accounts and related assertions that are most at risk of material misstatement, which is referred to as inherent risk. This step is crucial for planning the audit strategy.

What Is the First Stage in Audit Risk Assessment