Identify and assess risks

Risk assessment procedures are organized across several documents in the Risk Assessment Procedures folder:

• A-300 Risk Assessment Scoping — scoping the financial statement areas relevant to the engagement

• A-305 Risk Assessment Detailed Procedures

• A-310 Planning Analytical Review — analytical procedures performed during planning

• A-315 Risk Assessment Procedures

• A-320 Journal Entry Testing

• A-325 Engagement Quality Review — Planning

Adding risks

Risks identified during planning can be added at any time, either individually or from the risk library.

To add a risk:

1. On the Risk & Controls page, select Risk, then New Risk.

   

   Or, on the engagement toolbar, select New engagement item () | Risk.

   

2. Enter a title and description for the risk.

3. Select the appropriate level of risk. Select the Financial Statement level if the risk has a pervasive effect on the financial statements and potentially affects many assertions. Select the Assertion level if the risk affects a specific financial statement area.

4. Complete any other applicable options.

   

Risks are surfaced in the engagement-wide Risks & controls tab and in the AC-115 Risk & Controls Matrix. Risks can also be linked at the procedure level within a checklist, allowing risk responses to be traced directly to the work performed.

Add a risk from the risk library

You can add risks to the engagement directly from the predefined list in the risk library.

To add a risk from the risk library:

1. On the Risk & Controls page, select Risk, then select Risk Library.

   

   Or, on the engagement toolbar, select New engagement item () | Risk from library.

   

2. Filter the list of risks using the Categories drop-down menu and select RESET to clear the filter.

   

3. Select the checkbox next to the risks you want to add to the engagement. As you select risks, the number next to the Selected Risks indicator () increases. Select the indicator for a list of selected risks.

4. When you have finished selecting risks to add, select the Selected Risks indicator (), then Add to engagement.