Adding Financial Statement Level Risks

Financial statement level risks display in the Financial Statement Level Risks table in form KBA-502 Summary of Risk Assessment. They also are in all substantive audit programs The 800 series of forms, whose index number and name are specific for each title. These include AUD-800 Audit Program – (Custom) through AUD-822 Business Combinations..

When you add a financial statement level risk, you can document a planned overall response and, if needed, link program steps in a substantive audit program to the risk.

Note: By default, one financial statement level risk, Management Override, is provided. You can edit the description and add a planned overall response for this risk. You cannot, however, rename or delete it.

If someone else is the active user of KBA-502, you cannot add a risk until that user submits their changes and is no longer the active user of that form. The moment you start entering information to create a risk, you become the active user of KBA-502. When you click Add Risk or Reset Risk Form, you will no longer be the active user.

To add a financial statement level risk, do the following:

1. While in the engagement view or a form view for an engagement, click Risk Summary.
2. Click the Financial Statement Level Risk section to expand it.
3. Complete the information about the risk.

   Field	Description
   Risk name	Enter a unique name of up to 30 characters. You will use this name to link program steps to the risk. Note: You cannot use the pound sign (#) or the pipe symbol (|) in this field.
   Risk description	Enter brief information about the risk.
   Type of risk	Select one or more options as needed. See the instructions in KBA-502 Summary of Risk Assessments for information on the factors to consider when determining if a risk is significant or might be related to fraud.
   Planned overall response	Enter responses to the risk. See the instructions in KBA-502 Summary of Risk Assessments for possible responses. Note: You must make a selection here to clear the Unaddressed Risk diagnostic for a particular risk.
   Form Identified in	KBA-502 is selected by default. You can select a different option if needed. In audit programs, this selection results in the risk being added to the list of findings in the Results section of the audit program.

4. Click Add Risk to save the information.