Question

Review Risk Assessment procedures. Of those displayed in the book, which do you feel is most important? Why?

Answer 1

Risk assessment procedures:

Risk assessment procedures include verification of the accounting entries with supporting documents to ensure that the accounting entries have been correctly recorded in the books of accounts of an organization. The financial transactions must be authorised by the appropriate authority in an organization to ensure these are in accordance with the objectives of an organization. Verifying the internal controls within an organization to assess whether these have work effectively throughout the intended period of reliance in an organization.

Most important risk assessment procedure and the reason:

Out of the all the internal controls within an organization is the most important as if these are effective and have worked efficiently then the probability of mistakes occurring, both intended and unintended mistakes, is reduced significantly. Thus, the underlying information will be correct on the basis of which the financial statements shall be prepared and the financial statements shall also be prepared correctly to reflect the actual financial position of an organization as on a particular date.