Audit risk: thinking outside the box

Concepts of risk, control, data and analysis are changing with potentially far reaching effects for audits of all sizes, particularly in light of plans for an overhaul of ISA 315, says Katharine Bagshaw FCA

Thinking outside the box is dangerous. The risk of loss and damage involved in moving into uncharted territory and taking risks that are difficult to assess is not for the faint-hearted, which is why real change is hard to achieve, and why it takes so long. The incremental approach is the safe option. It almost always works well. But there are two risks associated with it.

The first is that the existing regime is simply swept away by a tide of external events. The second, more insidious and important as it happens more often, is that the existing regime is slowly marginalised, shunted to one side where it withers while genuinely radical new approaches compete, take root and flourish.

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