Identification and assessment of risks of material misstatement by the auditor

Abstract

The work refers to one of the important parts of the field of practical audit activity - the identifying and assessing the risks of material misstatement by the auditor.

The International Auditing Standard IAS-315 (Revised 2019) regulates the auditor's responsibility in the field of identifying and assessing the risks of material misstatements of financial statements.

In the not-so-distant past, auditors (auditing firms) operating in Georgia, who did not represent international network companies, paid less attention to the necessary procedures for hiring a client, which is required by the relevant international audit standards, and the client was hired recklessly - the main thing was to find a client; a thorough study of the client was not carried out and accordingly a decision was made as to whether it is possible to enter into a transaction with this or that client; Or there was only a review of accounting data, and with a superficial review of it, agreement was made to enter into a transaction with the client. In this case too, the appropriate procedure was not followed to make a decision to enter into the transaction with the client. And then, at the beginning of the work, such an important procedure as identifying the risks of material misstatement of financial statements and their assessing was not carried out.

Based on experience, the author describes in the work how the auditor should identify and assess the risks of material misstatement in financial statements and expresses important opinions about them