International Auditing Standards in the United States, 2nd Edition

CHAPTER 6

Risk Assessment and Tests of Internal Controls

In this chapter we focus on and address the following issues:

• Techniques and guidelines for assessing technological, economic, legal, and other forms of risk both in the United States and internationally
• Special focus on business risk and how the auditor can ascertain and determine substantive tests based on the level of risk
• How assessment of business risk varies between the United States (Public Company Accounting Oversight Board [PCAOB]) and abroad (International Standards on Auditing [ISA])

We then focus on an integrally related aspect, namely, internal controls over financial reporting, with special reference to:

• how auditors should assess internal controls over financial reporting; ...