The Audit Risk Model under the Risk of Fraud

  title={The Audit Risk Model under the Risk of Fraud},
  author={Saurav K. Dutta},
In this article, we derive an audit risk formula for a simple situation. This formula closely resembles the SAS 47 model when we assume that no material misstatement due to fraud exists. A simple case illustrates how the risk of material misstatement due to management fraud impacts audit risk and how performing special audit procedures to detect such irregularities can decrease overall audit risk. While SAS 53 requires auditors to assess the risk of errors and irregularities and plan the audit… CONTINUE READING

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