What are common risk factors in audit?

What are the common risk factors in an audit?

Common risk factors in an audit include inadequate internal controls, management override, and complex transactions.

Can you explain how inadequate internal controls can affect an audit?

Inadequate internal controls can lead to errors or fraud, making it difficult for auditors to rely on financial statements.

What role does management override play in audit risks?

Management override can compromise the integrity of financial reporting, as it allows management to bypass controls.

Are there specific industries more prone to these risks?

Yes, industries like finance, healthcare, and manufacturing often face higher audit risks due to regulatory complexities.