Business Commons^™

Evidential Effort And Risk Assessment In Auditing, Allen D. Blay, Tim Kizirian, L. Dwight Sneathen Jr.

School of Accountancy Faculty Research and Publications

This study responds to prior literature highlighting the need for academic research to study the linkage of risks to audit procedures purported in the Audit Risk Model. We use audit workpaper data from a Big 4 firm to examine two significant relationships implicit in authoritative audit guidance: (1) the application of the audit risk model in practice, and the relationship between preliminary risk assessments and audit procedures, and (2) the potential loss of risk information upon risk aggregation suggested in the Audit Risk Model. Our findings indicate that preliminary risk assessments significantly affect planned audit procedures, and the potential for …