AU-C section 315, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement, requires that the auditor identify and assess the risks of material misstatement (RMM) at the financial statement level and relevant assertion level for classes of transactions, individual account balances, and disclosures to provide a basis for performing further audit procedures.
To aid auditors in meeting this requirement, this document includes examples of RMM in a health and welfare plan financial statement audit which are