he role of disclosing secret reserves in reducing the risk of discovery in the audit of the financial statements

Abstract

The research aims to demonstrate the effect of disclosing secret reserves in reducing the risks of discovery, by presenting the conceptual framework for each of the secret reserves and the risks of discovery, and indicating the methods and objectives of forming secret reserves and their role in reducing the risks of discovery. The research in its theoretical framework, based on previous books, research and studies published in relevant periodicals and websites. The descriptive quantitative analytical approach was also used in the framework of studying and analyzing the reality of revealing secret precautions and the possibility of reducing the risks of discovery. The two researchers reached a set of conclusions, the most important of which is that the formation Secret reserves, whether intended or unintended, challenge the ethical position of managers and auditors alike, because the use of secret reserves impedes the impartiality and credibility of the financial statements of the economic unit, and that identifying the reasons that lead to the non-discovery of material misstatements and taking them into account during the planning of the audit process would reduce the possibility Audit procedures fail to detect such misstatements Thus reducing the risk of detection. In light of the conclusions reached, and in order to activate the role of disclosing secret reserves and reduce the risks of discovery, the researchers presented a set of recommendations, the most important of which was working to reduce the reasons that lead to not discovering material misstatements and taking them into account during the planning of the audit process, which would reduce the The possibility of audit procedures failing to detect such misstatements, and thus reducing the risk of discovery.