Audit Practices: Summary of Risk Assessment Methodologies
Abstract
This report provides the DoD audit community with information relating to risk assessment methodologies. The primary objective of an audit risk assessment is to provide its users with the assurance that audit resources are focused on those areas needing greatest attention and will provide the best value to the audit client. Audit risk assessments happen both on an overall (macro) and on a specific project (micro) level. DoD audit organizations rely on the results of risk assessment to help them manage the Department-wide audit resources of approximately 6,600 auditors. These auditors provide audit coverage for an organization that has an estimated annual budget of $329 billion in FY 2002. To accomplish their audit missions, auditors conduct risk assessments by following established standards, but also by developing additional procedures necessary for specific projects. Government and professional organizations provide standards and guidance on the requirements for completing risk assessments. The General Accounting Office issues Government Auditing Standards, which prescribe standards of fieldwork for both financial and performance audits and require an assessment of control risk, internal or management controls, and adequate audit planning. The Office of Management and Budget provides risk assessment guidance in Circular No. A-123 Management Accountability and Control and in Circular No. A-133 Audits of States, Local Governments, and Non-Profit Organizations. The American Institute of Certified Public Accountants Auditing Standards Board issues the Codification of Statements on Auditing Standards. The Statement on Auditing Standards requires adherence to the generally accepted auditing standards, which includes adequate planning and a sufficient understanding of internal controls for project planning under the Standards for Field Work.
Document Details
- Document Type
- Technical Report
- Publication Date
- May 06, 2002
- Accession Number
- ADA401614
Entities
Organizations
- Office of the Inspector General, U.S. Department of Defense