Risk assessment and responses
Assessment of Risk
Quality risk Assessment of risk
Based on the nature and circumstances of the Evaluate the nature and circumstances of the
Quality Objective entity. Must have reasonable possibility of entity to identify the significance of the risk Possibility
occurring and reasonable possibility of and if it is applicable to the entity. This will (Likelihood) of
Can create additional quality objectives adversely affecting the achievement of QUALITY influence if the risk is recorded and what the occurrence
OBJECTIVE response will be
Please note that these risks are for guidance Please note that these are examples and MUST
purposes and MUST be edited for the firm be edited for the firm
The firm and its personnel: We may not be aware of the ethical requirements or IESBA code of Ethics is to be followed
(i) Understand the relevant ethical requirements to changes to the code and as such may not comply with
which the firm and the firm’s engagements are all of them Employees who have not studied yet will not be
subject; and aware or have sufficient knowledge of the code and
ethics
(ii) Fulfil their responsibilities in relation to the
relevant ethical requirements to which the firm and When changes occur there is always a risk that
the firm’s engagements are subject. employees will not know the changes MEDIUM
There are various reasons why personnel would not
comply with ethical requirements. Either the pressure
Employees may know the ethical requirements but
of meeting the budgets or lack of supevision and MEDIUM
may not comply with them.
ethical attitude..etc. This will always be a risk and the
response is required by the standard.
This risk is increased in large firms where
communication may not be as frequent or open as in
smaller firms. Smaller firms however may also find
Threats may not be identified and responded to due this risk applicable, due to the nature of employees
who may not be able to identify a breach properly. MEDIUM
to incomplete knowledge or no communication
From prior monitoring and inspection outcomes, you
may have identified breaches in the past that have
not been identified.
This risk is also increased where employees are not
aware of, or have knowledge of, the requirements of
the code
All situations that could lead to ethical threats as per
the code needs t be considered for responses.
The "tone at the top" doesn't set the example to other
firm staff members of maintaining and upholding Upward reviews by staff MEDIUM
ethics.
Audit tenure of the firm may cause familiarity threats Evaluate how long you have provided different
that can cause the firm to not comply with ethical services to your clients. This can be done on the client MEDIUM
requirements profile listing - annexure 5.1
Others, including the network, network firms,
individuals in the network or network firms, or service
providers, who are subject to the relevant ethical
requirements to which the firm and the firm’s
engagements are subject:
No such risk exist. No network services are expected. N /A LOW
(i) Understand the relevant ethical requirements that
apply to them; and
(ii) Fulfil their responsibilities in relation to the
relevant ethical requirements that apply to them.
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sment and responses
Assessment of Risk
Response to Quality risk
Significance Firm Implementation
Level of Risk
(adverse) of Policy Reference
applicable Please note that these are example responses
effect Documentation is for guidance purposes only
and MUST be edited for the firm
Inform and train all employees on the applicable code Training was provided on the following dates:
of conduct and ethical requirements Attendance register is available
M.Kolokotronis & Associates Ltd compulsory ethics M. Kolokotrois & Associates Ltd has no trainees to
program for trainees will be utilised. enrol.
CPD requirements for managers and partners will be Team meetings on individual engagements will be
MEDIUM HIGH implemented in compliance with the requirements for 6.1 , 6.2 , 6.3 utilised to communicate ethical requirements for a
the applicable regulatory body specific engagement
See annexure 4.8 for engagement level declarations
MEDIUM HIGH
MEDIUM HIGH
MEDIUM HIGH
MEDIUM HIGH
LOW LOW
