The Risk Assessment is arguably one of the most important workpapers in any assurance engagement. The MyWorkpaper Trust Account B5 Risk Assessment workpaper has been designed to provide you with an efficient and compliant risk assessment for completing your assurance engagement and key to this is the use of our Risk Library which is embedded in the application.
Before we dive into how to use the B57 Risk Assessment, some background as to how the workpaper is structured at a high level. The B7 Risk Assessment is broken down into three key areas, being:
We will now cover each of these areas in detail below.
Under the Auditing Standards we are required to consider the control environment for every audit. However, given the limited segregation of duties of most, if not all, law practices or agencies ordinarily you as the auditor will determine that the risk of the control environment is high and that the controls should not be relied upon for the assurance engagement.
Accordingly, in the Trust Account programs we have included a specific control risk section at the top of the B5 Risk Assessment which provides you with a standard response to document your consideration of the control risk for the engagement. It is recommended that you read through this for each engagement and amend the standard text to reflect the differences which may exist for the specific engagement. Further, if you wish to change this default text on a global level for all of your engagements, we recommend that you create a firm based template using the Templates functionality in MyWorkpapers to provide consistency and the ability to edit the standard text globally.
For further details on how to create your own firm based template, please visit the Templates help topic or talk to one of the friendly MyWorkpapers staff.
To complete the Compliance Risk Assessment:
- Ensure you are inside the B5 Risk Assessment and have scrolled down to the Compliance Risks section;
- For each identified compliance risk, click on the Add risk from library button;
- On the pop up men, from the left hand side select the compliance area which the risk relates to;
- From the library of risks on the right, select the risk which applies to the fund;
- Back on the main Compliance Risks screen, if required edit the risk, workpaper reference and the audit approach by simply typing in the areas provided;
- Using the dropdown menu, set the Risk of Material Misstatement as either Significant, High, Medium or Low;
- Repeat the above for all of the identified risks of the account;
- If at any point you need to delete a risk added, simply
- Hover your mouse over the risk until the red delete icon appears on the right hand of the screen;
- Click on the delete icon;
- Click OK on the pop up warning.
Once you have complete the three separate risk assessments (Control Risk, Financial Statement Risks and Compliance Risks) you are then ready to conclude on the overall risk assessment of the Fund and define your overall audit approach.
To do this, simply:
- Ensure you are inside the B5 Risk Assessment and have scrolled down to the Overall Risk Assessment and Audit or External Examination Approach section;
- For each question, click on the Select dropdown option on the right hand of the screen;
- Select the most appropriate response from the dropdown options provided;
- If you want to change the section made;
- Hover over the response until the red delete icon appears;
- Click on the delete icon;
- Repeat the above process to enter your response.