Impact of Ict on Accounting Practice in Nigeria

The risk that the auditor gives an inappropriate audit opinion when the financial report is materially misstated. Audit risk has three components; inherent risk, control risk and detection risk. Audit risk refers to the chance of an error slipping through an audit, usually a financial audit, and resulting in a flawed audit report. Generally, audit risk is represented by the following formula: Audit Risk (AR) = IR x CR x DR. In the formula, IR, or inherent risk, refers to the susceptibility of misstatement, assuming that there are no internal controls to counter that chance of misstatement. Control risk (CR) expresses the chance that internal controls won't catch a misstatement, and detection risk (DR) refers to the chances that the auditor won't detect the misstatement in his or her audit.
Depending on the resulting percentage that results from the audit risk formula, the audit risk for a particular audit is often characterized as high, medium, or low. What percentage range constitutes a high audit risk is not absolute — it depends on the particular factors of a given audit. Though this determination provides a definitive starting point in risk assessment, this tool is certainly not dispositive of actual audit risk.
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Audit plan creation can begin as early as six months before the business's audit year starts and can require considerable staff and management resources. Audit plans should consider all areas of the business and focus resources on those with the highest risk. Once you have assessed these risks, you can determine how often you perform audits and evaluate whether your staffing levels need adjustment. Inherent risk can also be considered as Significant risks. Unlevered beta requires the ratio between the equity value and the value of the firm measured in market value terms. When a company has no debt, i.e. is unlevered, its asset beta is obviously equal to its equity beta.
An audit is an accounting procedure under which the financial records of a...