Financial Law and ManagementReference:
Formalizing the Assessment of Audit Risk In the Condition of Uncertainty
Abstract.The subject of the research is the assessment of audit risk in relation to qualitification for preparation of accounting statements. Vasilenko analyzes all stages of making fuzzy inference about audit risk. The researcher focuses on the input linguistic variable (the degree of non-observance of qualification for preparation of accounting statements) and ouput linguistic variable (the level of risk of material misstatement). Vasilenko presents his own software that is designed to analyze the influence of non-observance of qualification for accounting statements on the amount of risk of material misstatement using the fuzzy sets tool. The main research method used by the uthor is the fuzzy logic. The audit risk is evaluated using the qualitative and quantittive means based on a professional auditor opinion. The novelty of the research is caused by the fact that the author applies new definitions of the audit methodology: 'non-observance of qualificiation for preparation of accounting statements' and 'degree of non-observance of qualification for preparation of accounting statements'. The range of misstatement values that defines the level of non-observance is the value multiple of materiality level. The model of using fuzzy sets in the process of material misstatement risk evaluation compared to the degree of non-observance allows to develop rules that reflect different aspects of uncertainty related to the use of a professional auditor opinion.
Keywords: international audit standard, material misstatement, audit risk, computer program, financial statement assertions, fuzzy sets, audit, materiality, auditor’s professional judgment, uncertainty
Article was received:07-12-2018
This article written in Russian. You can find full text of article in Russian here .
The journal allows the author(s) to hold the copyright without restrictions. All authors automatically own full copyright in their work as soon as they create it, and current Russian Federal legislation protects them.
Licence type: Attribution-NonCommercial 4.0 International (CC BY-NC 4.0)
The journal is an open access journal which means that everybody can read, download, copy, distribute, print, search, or link to the full texts of these articles in accordance with Creative Commons Attribution- NonCommercial 4.0 International License.
You are free to:
Share — copy and redistribute the material in any medium or format.
Adapt — remix, transform, and build upon the material The licensor cannot revoke these freedoms as long as you follow the license terms.
Under the following terms:
Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
NonCommercial — You may not use the material for commercial purposes.
No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.