Assessing and Responding to Audit Risk in a Financial Statement Audit
Want to ensure effective and efficient execution of the Risk Assessment
Standards? AICPA has the resources you need:
- Audit Risk Assessment Tool (available online only)
- Assessing and Responding to Audit Risk in a Financial Statement Audit - AICPA Audit Guide
View an introduction to the Audit Risk Assessment Tool by Chuck Landes
The Audit Risk Assessment Tool walks an experienced auditor through the risk assessment procedures and documents those decisions necessary to prepare an effective and efficient audit program. Designed to be used in lieu of cumbersome checklists, it provides a top down risk-based approach to the identification of high risk areas to allow for appropriate tailoring of audit programs which will result in audit efficiencies. The tool is available in the Online Subscription format and includes access to the full Risk Assessment Guide.
The AICPA Audit Guide Assessing and Responding to Audit Risk in a Financial Statement Audit is the definitive source for guidance on applying the core principles of the risk-based audit methodology that must be used on all financial statement audits. This guide is written in an easy-to-understand style that enables auditors of all experience levels to find answers to the issues they encounter in the field. Unique insights, examples and a comprehensive case study clarify critical concepts and requirements.
To learn more about what is included in each format, click on the corresponding Available Formats link above.
> Find out what other CPAs are saying about the Audit Risk Assessment Tool!
“An elegant device that facilitates compliance with the standards”
– W. Douglas Logan, CPA, PC
“I was able to complete the risk assessment process faster compared to (a checklist method)…by identifying the significant areas/risks, we were able to focus on those areas and tailor the audit programs accordingly.”
- Sole Practitioner
“This process condenses the risk assessment down to just what you need to perform the risk assessment. The steps to get to the audit program generation were reduced and I think you end up with a better and more complete product at that point. I think it makes your planning process better.”
“I think time was the biggest efficiency (gained by using the ARA Tool). The support and guidance made the process of assessing risk quicker and clearer.”
– Audit Senior Manager from CPA firm with 88 professionals
“It would be beneficial to use this streamlined tool on a smaller entity where our current forms may be more inefficient.”
- Audit Supervisor from CPA firm with 400 professionals
This Audit Risk Assessment Tool is designed to provide illustrative information with respect to the subject matter covered and is recommended for use on audit engagements that are generally smaller in size and have less complex auditing and accounting issues. It is designed to help identify risks, including significant risks, and document the planned response to those risks. The Audit Risk Assessment Tool should be used as a supplement to a firm’s existing planning module whether in a firm-based or commercially provided methodology. The Audit Risk Assessment Tool is not a complete planning module.
The AICPA recommends the Audit Risk Assessment Tool be completed by audit professionals with substantial accounting, auditing and specific industry experience and knowledge. For a firm to be successful in improving audit quality and efficiencies, it is recommended that a 5+ years experienced auditor completes the Audit Risk Assessment Tool or the engagement team member with the most knowledge of the industry and client (often Partner in small/medium firms) provides insight to whomever is completing the ARA Tool. The AICPA recommends this should not be delegated to lower-level staff and just reviewed – it should be completed under the direction of the experienced auditor (if you delegate to inexperienced auditor you will be at risk for less effectiveness and efficiencies because the tool is intended to be completed by an experienced auditor).
The Audit Risk Assessment Tool does not establish standards or preferred practices and is not a substitute for the original authoritative auditing guidance. In applying the auditing guidance included in this Audit Risk Assessment Tool. the auditor should, using professional judgment, assess the relevance and appropriateness of such guidance to the circumstances of the audit. This document has not been approved, disapproved, or otherwise acted on by a senior committee of the AICPA. It is provided with the understanding that the staff and publisher are not engaged in rendering legal, accounting, or other professional service. All such information is provided without warranty of any kind.
Access to this product is on a concurrent user basis (defined as the number of simultaneous users accessing the tool at any given time). Such use is further limited to five (5) engagements per concurrent user subscription purchased.
Example A: If a subscription for 2 concurrent users is purchased, the tool may be used in no more than 10 engagements.
Example B: If the tool is to be used in connection with 35 such engagements, a subscription for 7 concurrent users would be required, whether or not the actual number of concurrent users was fewer than 7.
Pricing varies with the number of concurrent users. See the chart below: