Bahraini Auditors' Perceptions of the Importance of SelectedInherentRisk Factors in the Evaluation of Audit Risk

Abstract

The main purpose of this study is to gain insight into Bahraini auditors' perceptions of the importance of 17 variables in the assessment of inherent risk of various audit assignments. The study also seeks to examine whether differences exist in the evaluation of variables, influencing the assessment of inherent risk between auditors working for the Big‐Six accounting firms and those working for local or regional firms and between auditors practicing in Bahrain and those practicing in the UK. A questionnaire was distributed and responses from 58 auditors were received. The study found that auditors practicing in Bahrain have difficulties in identifying variables associated with the assessment of inherent risk. Of the 17 variables examined in this study, only six variables were identified by the majority of Bahraini auditors as inherent risk factors. The results also suggest that statistically significant differences exist between auditors working with “Big Six” firms and those working for local/regional firms with respect to identification of selected variables as inherent risk factors and their importance in the assessment of inherent risk. Finally, the findings suggest that UK auditors appear to be better trained than their Bahraini counterparts at identifying factors affecting inherent risk.