The existence of audit risk is recognized by the statement in the auditor’s standard report that the auditor
- Obtains reasonable assurance about whether the financial statements are free of material misstatement.
- Assesses the accounting principles used and also evaluates the overall financial statement presentation.
- Realizes some matters, either individually or in the aggregate, are important while other matters are not important.
- Is responsible for expressing an opinion on the financial statements, which are the responsibility of management.