Fraud risk in revenue and management override of controls are treated as significant risks. Analytical procedures alone are not sufficient for significant risks; specific substantive procedures are performed and related controls are understood.
Source: BDS 315, BDS 330
Related terms
Risk of material misstatementThe risk that the financial statements are materially misstated, due to error or fraud, before the audit; it consists of inherent risk and control risk.Management override of controlsManagement's ability to manipulate accounting records or prepare fraudulent financial statements by overriding controls that otherwise appear to operate effectively.Presumed fraud risk in revenue recognitionThe auditor's presumption, unless rebutted with justification, that there are risks of material misstatement due to fraud in revenue recognition.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: November 8, 2026 · This definition is for general information only.