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Considerations Relating to Specific Inherent Risk and Control Risk

Author

Listed:
  • Florin Ioan Scortescu

    (Associate Professor Ph.D., "Petre Andrei" University of Iasi, Romania)

Abstract

Audit risk (Ra) occurs if financial statements belonging to the firm are majorly distorted, in which case an auditor may give a defective opinion on them. This risk depends on the risk of significant distortion (Rds) and on the risk of detection (Rd). The risk of significant distortion (Rds) takes into account the inherent risk (Ri) and the control risk (Rc). The balance of an account or more transactions may have majorly distorted values, with these falling within the scope of the inherent risk. It is in turn structured in general risk and specific risk. The concept of specific risk is apparent from aspects which take into account the practice previously acquired by the auditor and the way in which the auditor is aware of the audit areas. Assessment of the specific inherent risk and control risk shall be carried out in the following.

Suggested Citation

  • Florin Ioan Scortescu, 2020. "Considerations Relating to Specific Inherent Risk and Control Risk," Anuarul Universitatii „Petre Andrei” din Iasi / Year-Book „Petre Andrei” University from Iasi, Fascicula: Drept, Stiinte Economice, Stiinte Politice / Fascicle: Law, Economic Sciences, Political Scien, Editura Lumen, Department of Economics, vol. 26, pages 200-207, December.
    • Handle: RePEc:lum:rev11d:v:26:y:2020:i::p:200-207
    DOI: https://doi.org/10.18662/upalaw/58
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    References listed on IDEAS

    as
    1. Madalina Ecaterina POPESCU & Eva MILITARU & Dan PELE & Miruna MAZURENCU MARINESCU & Valentina VASILE & Simona ILIE & Adina MIHĂILESCU & Adela ȘERBAN, 2017. "Support for Establishing a Minimum Wage-Setting Mechanism in Romania," Books of Marketing and Economy, Editura Lumen, Department of Economics, edition 1, volume 1, number 09, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    risk; specific; control; detection; acceptable;
    All these keywords.

    JEL classification:

    • K1 - Law and Economics - - Basic Areas of Law
    • K2 - Law and Economics - - Regulation and Business Law
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

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