The existence of risk is implicit in the phrase “in my opinion” that appears in the auditors report. The auditor is indicating that he or she is accepting some risk that the opinion rendered may be incorrect. In planning and executing an audit, the auditor strives to reduce this risk to a level that is acceptable to the client, the users, and himself or herself.

REQUIRED

Discuss the steps that the auditor takes to reduce the risk to an acceptable level. What guidance do the professional standards provide to the auditor?