Inherent risk evaluated based on the nature of the companys production and business activities The auditor learns about aspects related to purchase, purchase characteristics, purchasing methods, supp.
Inherent risk evaluated based on the nature of the company's production and business activities The auditor learns about aspects related to purchase, purchase characteristics, purchasing methods, suppliers, to assess potential risks for this item Control risk (CR): is the risk of material misstatement in each transaction, the payables item to suppliers in the financial statements, when calculated separately or in aggregate, which the accounting and internal control systems did not completely prevent or detect and correct timely treatment Control risk evaluated based on the entity's internal control system, including: control environment, accounting system, control procedures, internal control department Assessment of the control environment is based on: • Management characteristics: the person in power approves the company's purchasing and payment policies • The operation of the unit, how is the policy making at all levels implemented • Accounting system: Organize the operating sections, documents (inventory notes, receipts, delivery records, economic contracts), system of accounts, books of records (purchase diaries, newspapers) purchase report, treasury book, general ledger, account details book 331, warehouse card, ) Detection risk (DR): is the risk of material misstatement in each transaction, item of Liability to suppliers in the financial statements, when calculated separately or in the aggregate, but not detected by the Auditor during the audit The relationship between the types of audit risk: AR = IR*CR*DR Từ đó, DR =AR/ (CR*DR) Detection risk evaluated through the following matrix: Table 1.1 Risk Matrix