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China Defender

Common Risk Assessment Methods

Release time:

2017-05-17

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Summary:

1. Risk Factor Analysis Risk Factor Analysis is a risk assessment method that evaluates and analyzes the factors that may lead to the occurrence of risk, so as to determine the probability of risk occurrence. The general idea is: investigate the source of risk, identify the risk conversion conditions, determine whether the conversion conditions are available, estimate the consequences of risk occurrence, risk evaluation. 2. Fuzzy Comprehensive Evaluation Method 3. Internal Control Evaluation Method Internal Control Evaluation Method refers to a method of determining audit risk by evaluating the internal control structure of the audited unit. Since the internal control structure is directly related to control risk, this approach is mainly used to control wind.

1. risk factor analysis method

Risk factor analysis refers to a risk assessment method that evaluates and analyzes the factors that may lead to the occurrence of risk, so as to determine the probability of risk occurrence. The general idea is: investigate the source of risk, identify the risk conversion conditions, determine whether the conversion conditions are available, estimate the consequences of risk occurrence, risk evaluation.

2. fuzzy comprehensive evaluation method

3. internal control evaluation method

Internal control evaluation method refers to a method of determining audit risk by evaluating the internal control structure of the audited unit. Since the internal control structure is directly related to control risk, this method is mainly used in the assessment of control risk. The research and evaluation made by a certified public accountant on the internal control of an enterprise can be divided into three steps:

4. analytical review method

The analytical review method is an analysis by a certified public accountant of the audited entity's key ratios or trends, including the investigation of unusual changes and differences between these important ratios or trends and expected amounts and related information, in order to speculate on the possibility of material misstatements or omissions in the accounting statements. There are three commonly used methods: comparative analysis, ratio analysis and trend analysis.

5. qualitative risk assessment method

Qualitative risk evaluation refers to those methods that can qualitatively assess audit risk through observation, investigation and analysis, and with the help of the experience, professional standards and judgment of certified public accountants. It has the advantages of convenience and effectiveness and is suitable for assessing various audit risks. The main methods are: observation, investigation and understanding, logical analysis, similar estimation.

6. risk rate risk evaluation method

Risk rate risk evaluation method is a kind of quantitative risk evaluation method. Its basic idea is: first calculate the risk rate, and then compare the risk rate with the risk safety index, if the risk rate is greater than the risk safety index, the system is in a state of risk, the greater the difference between the two data, the greater the risk.

The risk rate is equal to the frequency of risk occurrence multiplied by the average loss of risk occurrence, risk loss includes intangible loss, intangible loss can be converted according to a certain standard or calculated by amount. Risk safety indicators are based on a large amount of experience and statistical calculations, taking into account the level of science and technology at the time, socio-economic situation, legal factors and people's psychological factors to determine the lowest generally acceptable risk rate. The risk rate risk evaluation method can be used in the risk management of accounting firms and the CPA industry.

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