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Inherent risk
Auditing
" Auditor may assess the inherent risk of two different assertions as lower while recognising that one assertion has less inherent risk than the other, although both have been assessed as lower " - What does it mean ? Why auditor do this ?
Answers (2)
Inherent risk is the natural risk level without using controls or mitigations to reduce its impact or severity. It can be measured by two factors â?? impact and likelihood. Auditors assess the risk of material misstatement at the assertion level so they can determine the level of substantive work. When inherent risk is less than high, you can perform fewer or less rigorous substantive procedures. Inherent risk associated with every assertion might be different. Two or more might have less inherent risk but when compared against each other one might be more than the other
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