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Inherent Risk and Indicative Factors: Senior Auditors’ Perceptions

journal contribution
posted on 2023-05-18, 10:08 authored by Shailer, G, Willett, RJ, Wade, M, Yap, K
This paper examines the perceptions of senior auditors in large firms in Sydney, Kuala Lumpur and Auckland concerning the nature and assessment of the inherent risk in risk based auditing. The geographic dispersion of participants from internationally linked firms does not appear to result in any cultural and geographic effects. Assessment of inherent risk appears predominantly qualitative and is not necessarily linked to the comprehensive aggregation of risks typically presented in audit risk models. There is some blurring of control risk factors with inherent risk and one‐third of participants assess inherent and control risk jointly. Risk factors appear to be grouped in importance in a manner that suggests different attitudes to management, system‐oriented, environmental and oversight risks. The identification of four possible factors (internal risk, external risk, system risk and oversight threats) may provide a basis for further investigation of how auditors assess inherent risk. There is an apparent division between “internally” and “externally” sourced risk.

History

Publication title

Managerial Auditing Journal

Volume

13

Issue

8-9

Pagination

455-464

ISSN

0268-6902

Department/School

TSBE

Publisher

Emerald Group Publishing Limited

Place of publication

United Kingdom

Repository Status

  • Restricted

Socio-economic Objectives

Religion and society

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    University Of Tasmania

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