explain audit risks associated with external auditor

Expert Solution

In recent years the quality of external audit has declined considerably. The audit risks(Audit risk refers to the risk that an auditor may issue an unqualified report due to the auditor's failure to detect material misstatement either due to error or fraud) have shot up and standards of the audit have fallen.

External auditors have become lazier, prompting clients to deliver more information in a specific format so they can push it through an algorithm, rather than reconciling the data themselves.Recently, however, the external audit profession has come under increased scrutiny and mounting criticism over perceived conflicts of interest, a lack of independence and subpar work.Detection risk which is a part of audit risk is concerned with external auditors.The common cause of detection risk is improper audit planning, poor engagement management, wrong audit methodology, low competency and lack of understanding of audit clients which is the work of external auditor.

ekkarill92 answered 2 years ago

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