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B3 Preliminary Risk Assessment

Accessing Preliminary Risk Assessment for the First Time

The first time you access Preliminary Risk Assessment, you will be prompted if you want to create the Preliminary Risk Assessment based on Lead Schedules or Lead Schedule Summaries. The Preliminary Risk Assessment is dynamically created based on the lead schedules or lead schedule summaries in your Working Paper Index.

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Accessing and Exiting Full Screen Mode

The Preliminary Risk Assessment workpaper has been designed to be your central audit planning and risk assessment document and accordingly the amount of information contained in the workpaper is quite extensive. Accordingly, we highly recommend that you view the workpaper in full screen mode, no matter what device you are viewing it on.

A shorted animated gif can be found below showing you how to enter and exit from full screen mode.

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How to Use the Functions Toolbar

The functions toolbar is found at the top of the Preliminary Risk Assessment workpaper and contains a heads up display of materiality, along with an array of options which can be used to further customise the workpaper for your specific engagement.

Below is a diagram pointing out each of the features on the Preliminary Risk Assessment function toolbar, along with a short description of how to use each of these features.

Hide All / Show All

Ticking the Hide All / Show All button will allow you to quickly and easily expand or collapse all of the various audit sections which are being displayed in your Preliminary Risk Assessment.

Edit Mode

Accessing Edit Mode in the Preliminary Risk Assessment will allow you to delete sections, risks and customise the workpaper specifically for your firm. We will cover off on each of these sections further on. 

Like all other forms in MyWorkpapers, the edit mode button in the Preliminary Risk Assessment is a restricted feature and access to this button is restricted only to those staff members with permission to Edit Workpapers. For more information on the Roles & Permissions module in MyWorkpapers, please visit the Roles and Permissions topic in this help centre. 

Re-populate

If adjustments have been made to the trial balance or the accounting structure and you want the Risk Assessment worksheet to be updated with the latest data, use the Re-populate button.

If the table has never been re-populated, the date will be displayed as N/A. Once the re-populate button has been used, the date will be updated to the last re-populated date.

Using this Re-populate button will update the data inside the table to the latest figures in the Accounting structure. Please bear in mind that some data/information might be lost if the Accounting Structure is different.

Materiality Display

The materiality display is fully integrated with the Materiality workpaper, ensuring that there is no more data entry, just data flow from one workpaper to another.

The materiality display will provide you with a heads up display of the Overall Materiality and Performance Materiality which you have set for your engagement.

You can directly drill down into the Materiality workpaper from the Audit Plan by simply clicking on the blue underlined hyperlink on either the Overall Materiality or Performance Materiality

Display Zero Balances

By default, the Preliminary Risk Assessment will only show audit sections and lead schedules where a balance is present or where a risk is attached to the lead schedule. Accordingly, there may be times when you have not imported a trial balance yet or a particular section or lead schedule isn't displayed however you need to add risks to the particular section. In these cases you are able to tick the Display Zero Balances option and this will reveal all sections and lead schedules on the workpaper.

Show Audit Areas

By default, the Audit Areas in the Preliminary Risk Assessment will be set to be displayed as this area contains salient functionality to tailor and customise your audit approach and each of the audit programmes for the relevant financial statement areas. However, if you wish for this area to be hidden from view then you are able to quickly and easily hide this area by ticking the Show Audit Areas tickbox.

Display Only Significant Risks

If you are completing a risk based audit it is beneficial to be able to summarise and display all risks on an audit, as well as only those which are considered significant risks. With the Display Only Significant Risks option in the Preliminary Risk assessment you are able to quickly and easily only display those risks which are marked as significant, including the planned audit approach to address those risks.

Balances Display

The Preliminary Analytical will display the Interim, Current Year Draft and Prior Year trial balance for quick and easy reference and comparison across all periods. To take full advantage of this, we strongly recommend that you import the client trial balance utilising our Trial Balance Import function

However, if required you are able to override the balances shown on screen, as follows:

  1. Ensure you are in Preliminary Risk Assessment and ideally in Full Screen Mode
  2. Identify the balance which you want to manually insert or override (e.g. Current Year Fixed Assets balance)
  3. Hover your mouse over the balance until the lock icon appears
  4. Click on the lock iconto open the cell
  5. Override the cell with the desired value
  6. Click anywhere on the screen and the changes will automatically save. The cell area will turn to a shade of red to indicate that this has been manually overridden

 If you want to undo the manual override, simply:

  1. Hover over the right hand side of the overridden number to reveal the dropdown arrow
  2. Click on the dropdown arrow and select Revert back to original value
  3. You have now successfully reverted the value back to the original and the cell will be linked to the value displayed on the Lead Schedule

Overridding the Automatic Materiality Determination

MyWorkpapers RiskFlow system fully automates the identification of material balances in Preliminary Risk Assessment, with each financial statement area (represented by the Lead Schedules) being marked as either material or not depending on whether the balance displayed is greater than Performance Materiality.

Due to the nature of balances there is more than quantitative factors in determining whether a balance is material or not, other qualitative factors potentially causing a particular class of transaction or balance to be material. Accordingly, in Preliminary Risk Assessment you are able to quickly and easily override the automatic materiality determination as follows.

  1. Identify the materiality deterimination which you would like to override
  2. Hover over the Yes/No response until the lock icon appears
  3. Click on the lock icon to access the override menu
  4. Provide a description as to why the item is/is not considered material
  5. Click Override
  6. The cell will now display your override and will turn to a shade of red to indicate that it has been overridden. You can hover your mouse cursor over the dark red flag in the top left hand corner of the cell at any time to visibly see the reason for the override

 

Adding New Risks

  1. Identify the Lead Schedule which the risk related to (e.g. H1 Debtors)
  2. Under the risk column, in the box provided, add in the details of the identified risk
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  1. Select whether the identified risk is considered significant or not
  2. Click on the assertions area and select the assertion(s) at risk
  3. If you need to add mutliple risks for a single Lead Schedule, simply hover your mouse cursor over the risk column until the Add New Risk button appears
  4. Click the Add New Risk button and repeat steps 2 through to 4

 

Deleting Risks

As risks identified are an extremely important factor in a risked based audit approach, the ability to delete risks has been safely stored behind the Edit Mode in Preliminary Risk Assessment, ensuring that accidental deletion of risks or planned approaches to address the risks is minimised. As mentioned above, access to Edit Mode is restricted via the Roles and Permissions module. 

To delete a risk, please complete the following steps:

  1. Access Edit Mode in the Audit Plan by pressing the Edit Mode button on the top left hand corner of the screen
  2. Identify the risk you want to delete and press the red delete icon to the right of the risk
  3. Press OK to permanently delete the risk

    Attention: Once the risk has been deleted, it cannot be recovered
  4. When finished deleting all risks no longer required, press the Edit Mode button again to close out from edit mode

Audit Areas

Once you have determined which balances are material and identified the risks for your engagement, the next step is to assess what level of risk exists for each of the financial statements areas.

The default Audit Areas provided are directly linked to the audit program, however you are able to add in additional Audit Areas as required, which is covered a little further down the page.

How to Assess the Risk of an Audit Area 
  1. Identify the specific Audit Area you are assessing the risk of (i.e. Sales and Other Income);
  2. Using professional judgement and audit evidence gathered during the planning stage of the Audit, select whether the Inherent Risk and Control Risk has been determined as High, Medium or Low;
  3. Repeat procedures 1 and 2 for all other relevant Audit Areas.
How to Add Custom Audit Areas

Adding custom areas is quick and easy and is very similar to how you add additional risks to your audit plan.

  1. Identify the section which you want to add an additional Audit Area to (e.g. H Sales and Debtors);
  2. Hover your mouse at the bottom of the last Audit Area until the Add Audit Area button appears;
  3. Press the Add Audit Area button;
  4. Type in a description of your new Audit Area;

    Note: The new audit area does not have the small lock icon showing. The lock icon indicates that it is a default Audit Area and is integrated with the audit programme for that section.

    How to Delete Audit Areas

    The ability to delete risks has been safely stored behind the Edit Mode in the Audit Plan, ensuring that accidental deletion of audit areas which are linked to audit programmes is minimised. Access to Edit Mode is restricted via the Roles and Permissions module. 

    To delete an audit area, please complete the following steps:

    1. Access Edit Mode in the Audit Plan by pressing the Edit Mode button on the top left hand corner of the screen;
    2. Identify the audit area you want to delete and press the red delete icon to the right of the audit area;
    3. Press OK to permanently delete the audit area;

      Attention: Once the audit area has been deleted, it cannot be recovered and any linkage to the audit programme will be gone
    4. When finished deleting all audit areas no longer required, press the Edit Mode button again to close out from edit mode;

 

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