The auditor assesses this risk at the financial statement level and at the level of accounts, classes of transactions and disclosures. The higher the assessed risk, the more and more persuasive audit evidence is obtained.
Source: BDS 315
Related terms
Inherent riskThe susceptibility of an account balance, class of transactions or disclosure to a material misstatement before consideration of any related controls.Control riskThe risk that a material misstatement will not be prevented, or detected and corrected, on a timely basis by the entity's internal control.Audit riskThe risk that the auditor expresses an inappropriate opinion when the financial statements are materially misstated.Adverse opinionThe opinion in which the auditor states that the financial statements are not presented fairly, where misstatements are both material and pervasive.Agreed-upon proceduresAn engagement in which the practitioner performs procedures agreed with the entity and, where relevant, a third party, and reports only the findings without providing assurance.Analytical proceduresThe evaluation of financial information through analysis of plausible relationships among financial and non-financial data.
Last updated: October 31, 2026 · This definition is for general information only.