Auditing Basics Audit Risk, Control Risk, and Detection Risk
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SOC 1 and SOC 2 audits are largely impacted by various types of risk. During a SOC 1 and SOC 2 audit, an auditor will be focused on limiting the following types of risk: audit risk, control risk, and detection risk. So, how are those risks different? How to they affect an auditor while performing SOC 1 or SOC 2 audits? Let’s discuss. According to the AICPA, audit risk is “the risk that the auditor expresses an inappropriate audit opinion when financial statements are materially misstated. Audit risk is a function of the risks of material misstatement and detection risk.” Control risk takes into account the potential for error from both humans and automated processes. Detection risk is the risk that an auditor will fail to detect something that’s in existence.
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KirkpatrickPrice is a licensed CPA firm, PCI QSA, and a HITRUST CSF Assessor, registered with the PCAOB, providing assurance services to clients in more than 48 states, Canada, Asia, and Europe. The firm has over 13 years of experience in information security and compliance assurance by performing assessments, audits, and tests that strengthen information security and internal controls. KirkpatrickPrice most commonly provides advice on SOC 1, SOC 2, PCI DSS, HIPAA, HITRUST CSF, GDPR, ISO 27001, FISMA, and CFPB frameworks.
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