One of the most challenging parts of an audit is the risk assessment. Within the risk assessment, the auditor needs to decide which account groups and classes of transactions have a risk of material misstatement, and which are significant accounts. Used in both degrees of risk is the term “relevant assertions” with two very different meanings.

This class takes a look into what the standards mean by “relevant” in the context of the account’s risk identification. We will then explain the differences, and what the standards require for testing with these assessed levels of risk.

Course Key Concept: Risk Assessment, Relevant Assertions, Risk of Material Misstatement, Audit Planning, Significant Accounts, Key Controls, Audit, RMM