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Relationships Among Components of Engagement Risk

Author

Listed:
  • Evren Dilek Sengur

    (Istanbul University, Turkey)

Abstract

Accounting scandals exploded at the beginning of 2000s and the collapse of Arthur Andersen highlighted the importance of implementing engagement risk management strategies in audit firms. Engagement risk refers the overall risk associated with an audit engagement and it consists of three components: client's business risk, auditor's business risk, and audit risk. The main purpose of this study is to describe each components of engagement risk and explain relations among them. Additionally, the paper points out the importance of engagement risk management throughout the audit and demonstrates engagement risk management strategies at client acceptance/continuance, planning and completion of audit.

Suggested Citation

  • Evren Dilek Sengur, 2012. "Relationships Among Components of Engagement Risk," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 12(1), pages 292-304.
    • Handle: RePEc:pet:annals:v:12:y:2012:i:1:p:292-304
    as

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    File URL: http://upet.ro/annals/economics/pdf/2012/part1/Sengur.pdf
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    References listed on IDEAS

    as
    1. Kellogg, Robert L., 1984. "Accounting activities, security prices, and class action lawsuits," Journal of Accounting and Economics, Elsevier, vol. 6(3), pages 185-204, December.
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    More about this item

    Keywords

    engagement risk; audit risk; client’s business risk; auditor’s business risk; risk management;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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