Document background
The Audit Risk Assessment is a crucial document required under Danish audit regulations and international auditing standards for planning and executing effective audits. It is prepared at the initial phase of an audit engagement to identify, assess, and document risks of material misstatement in financial statements. The document must comply with the Danish Auditors Act (Revisorloven), EU audit regulations, and International Standards on Auditing, particularly ISA 315. It includes detailed analysis of the client's business environment, internal controls, IT systems, and financial reporting processes. The assessment guides the audit team in developing appropriate responses to identified risks and forms the basis for the audit strategy. This document is particularly important in the Danish context due to the strict regulatory oversight by the Danish Business Authority (Erhvervsstyrelsen) and the need to maintain high audit quality standards in accordance with both national and EU requirements.
