Risk Identification And Risk Assessment In Risk-based Audit Techniques

The validity of auditing lies in its applying advanced concepts and models to recognize the inherent risks and adopt the specific measures accordingly so as to better control risks, inspect risks and reduce the overall auditing risks. The existing traditional auditing methods focus more on inspecting risks by fixed procedures, dealing less with the real source of auditing risks---inherent risks, i.e. the running risks of businesses. The auditing concept and model based on risk-orientation is helpful to fulfill the effective management on overall auditing risks. Based on this theme, this paper deals with the issue of how to recognize and evaluate the running risk, i.e. the inherent risk of businesses.The second part of this paper introduces the business risk models (BRM) and risk-control-models, providing the concrete study objects for the running-risk-recognition and evaluation in the process of auditing.Business risk models (BRM) divides risks into three categories, 73 usual risks, including environmental risks, process implement risks and information risks in decision making.Business risk control is one of the organic parts in inner-business control. In order to achieve its sustained development---value creation, the business builds up a large amount of risk-control instruments and concrete measures. Risk-control consists of three categories: supervisory control, layer control and concrete control.The third part of this paper introduces the recognition and evaluation of managing risks. The main points are as follows:I. Auditors'risk-recognition and risk-evaluation can apply to businesses with different scales and complexities.II. In the process of recognizing and evaluating the running risks, CPAs'main tasks are:...