Auditor's Risk Assessment

Auditor's risk assessment is the process of identifying and evaluating the potential areas where financial statements might be incorrect or misleading. It helps auditors determine where to focus their attention to ensure the financial reports are accurate. This involves understanding the company's operations, internal controls, and any factors that could lead to errors or fraud. By assessing risk, auditors can plan appropriate procedures to verify the financial information, providing confidence to investors and stakeholders that the company's reported financial position is reliable.