External Factors

Free CPA AUD (Auditing & Attestation) lesson in Assessing Risk and Developing a Planned Response. 13 min read, ~1,965 words.

AU-C 315 requires the auditor to understand external factors separately from internal operations and controls. External factors include industry, regulatory environment, financial reporting framework, competitive forces, technology, supplier/customer concentration, and macroeconomic conditions. External factors create business risks, some of which become risks of material misstatement (RMM) at the assertion level...

What this lesson covers

• Content
• Example 1
• Example 2
• Common Mistakes
• Check Your Understanding
• Exam Shortcuts

Learning objectives

• II.B1

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