THE BUSINESS RISK AUDIT: ADVANTAGES, DISADVANTAGES AND OPPORTUNITIES OF USE IN UKRAINE

Abstract

The global economy, the dynamic external environment, hard competition, a large number of bankrupt enterprises, whose reporting has been verified and verified by the auditor, the requirements of the legislation make it necessary to develop new approaches to audit and its documentary support. The article proves the need to find new approaches to audit in Ukraine. It is established that Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements divides the concept of business risk and audit risk. However, they do not require in-depth study and description of business risks in the audit of financial statements. At the same time, market conditions determine the need for their research and evaluation in relation to audit risk. The Business risk audit methodology has received much attention within the auditing industry over the past two decades because it is believed to provide technical advantages to auditors when researching and identifying risk in companies’ operations. The essence of the article is explored, advantages and disadvantages of business risk audit are explored. The need to implement the Business risk audit methodology in Ukraine is evidenced by the low level of income of audit firms from the audit. A similar situation was observed in the United States in 1990. The implementation of the Business risk audit audit methodology has improved this situation. The possibility and obstacles that may arise when applying the Business risk audit audit methodology engagement subjects in Ukraine are considered. Today, management is the most commonly used process management approach. Therefore, we substantiated the application of its provisions in the Business risk audit methodology. A business risk audit module has been developed, which takes into account the peculiarities of the activities of business entities and auditors in Ukraine. The proposed model is based on five principles of business monitoring and measurement: strategic analysis, business process analysis, risk assessment, business measurement and continuous improvement.