THE IMPACT OF THE RISK IN AUDITING FINANCIAL STATEMENTS

Abstract: Any investor who has to use a financial audit report expects from the auditor an endorsement, a guarantee of the business continuity and, why not, the fact that the business entity s/he has invested his/her financial capital in is not subject to any risks. Many users put the sign of equality between economic failure and the audit risk. Economic failure occurs when the business entity is unable to repay its debts to its creditors because of general or specific economic causes: economic crisis, bad management or inadequate accounting or fiscal policies. The audit risk belongs exclusively to the auditor and appears when the financial statements contain significant errors, but the auditor concludes that the financial statements present a true and fair view of the financial position, of the performance and the change of capital. Because the auditor uses some evidence based on tests, there is a certain risk that s/he will not find a significant fraud