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This paper aims to improve understanding of risk assessment in auditing by focusing on specific assertions within account balances.

Modeling of the Audit Risk Assessment Process at the Assertion Level Within an Account Balance.

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This paper aims to improve understanding of risk assessment in auditing by focusing on specific assertions within account balances.
Examined inherent risk and control risk definitions at the assertion level.
Presented simulated cases demonstrating inconsistencies in risk assessments.
Developed two approaches for aggregating assertion-level risk assessments to maintain conditional independence.
Proposed a probability definition of inherent risk reflecting a range of error magnitudes.
Identified conditional independence as essential for coherent risk aggregation.
Found that a transaction-stream-oriented structure better supports achieving conditional independence.

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Randomized trial models risk assessment within account balances, suggesting improved evaluation at assertion level.

Lea et al. (1992) studied this question.

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