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In this paper we empirically examine the relationship of (1) risk assessments and (2) the extent of computerization of accounting systems to the incidence and magnitude of misstatements. The six largest public accounting firms in Norway provided misstatement data from 58 audits. The results show that inherent risk factors related to personnel issues are related to the incidence of misstatements at the financial statement level. These factors plus factors related to management integrity and prior period accounting adjustments are related to the magnitude of the misstatements. Inherent risk assessments at the account level had a marginally significant relationship with both the incidence and magnitude of the detected misstatements. On the contrary, we find that the auditors ’ CR assessments are not associated with the detected misstatements. All of the sample companies have partial or completely computerized accounting systems. Significantly more misstatements occurred in partially computerized companies due to inadequate segregation of duties and auditor disagreement with management’s judgments. The client’s internal control system failed to detect more misstatements in partially computerized systems because appropriate controls were missing or not properly applied. Finally, th