Unit 6 Listen and Read:
Activity Based Risk Evaluation Model of Auditing (ABREMA)
ABREMA integrates the three descriptive concepts of the audit objective, information misstatements and audit stages, with the two theoretical concepts of cognitive decision making and audit risk. For example, the first basic concept (the audit objective) only contains links to terms relevant to that concept; the second basic concept (management assertions) contains links to terms relevant to that concept, plus terms relevant to preceding concepts - in this case, just the first concept. Similarly, the third and fourth concepts contain links to terms relevant to the particular concept as well as relevant links to terms relating to preceding concepts. The last concept (cognitive decision making) contains links to that concept plus relevant links to terms relating to all other concepts. This perspective is particularly useful to students of auditing. Auditors achieve their objective by gathering and evaluating audit evidence. The objectives of the audit of financial statements are the same, irrespective of the entity to which the financial statements relate.