Scenario Planning as a Tool for Managing Audit Risks

Abstract

Abstract The article deals with scenario planning as a tool for managing audit risks in the planning and conducting of internal audit in order to minimize the risk of undetected errors, to obtain the reasonable assurance about the reliability of audit evidence. In the course of research the methods of logical analysis, synthesis, deduction, and observation were used. As a result the essence and methods of scenario planning were revealed to manage audit risk during internal audit, there was corrected the model to determine the sample size given the risky elements in the various scenarios, the use of scenario approach in conducting the audit of accounts receivable in «Blagoveshchensk cash-calculation center» Ltd. was considered. The obtained results can be used by auditors when choosing an approach to internal audit, methods of obtaining the audit evidence, determining the optimal sample quality in various scenarios of internal audit. Methodological aspects of scenario approach in the process of audit planning, adjustment of the sample volume model allow to substantiate the choice of a rational scenario that maximizes the economic benefits at the lowest cost for the audit, as well as to determine the risk management measures in the «narrow» areas where errors and distortions of financial indicators are possible.