Ethical Obligations and Decision-Making in Accounting 2nd Edition by Steven Mintz, Roselyn Morris

Exercise 15

What is the purpose of audit “risk assessment?” What are its objectives and why is it important in assessing the likelihood that fraud may occur?

Step 1 of 4

Audit:

The audit is the process of checking the financial statements of a company `to ensure that it is 100% authentic and free from any kind of bias or fraud.

Risk:

The uncertainty of return is a risk. The future is uncertain. The chance of loss on the investment is investment risk.

Fraud:

Fraud means the willingly wrong representation of something, to hide some material facts from outsiders or mislead them about some facts.