Questions On Business Risk Analysis

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Table of Contents Executive Summary______________________________________________________3 Introduction____________________________________________________________4 Understanding of Client business__________________________________________4 Business Risk Analysis__________________________________________________4 Risk Analysis__________________________________________________________5 Control Enviornment____________________________________________________7 Conclusion & Recommendations___________________________________________9 References_____________________________________________________________10 Executive Summary The main purpose of this report is to examine risk analysis associated with business and industry of new client and provide suitable controls which are appropriate for the client. Research for this report included a review of current year financial statement and preceding year’s data on web based. The major findings indicate that business of new client is an operating manufacturing business entity where it has business risk and inherent risks which are not covered by the firm and those are interest rate risk, going concern, debt repayment ability of the firm and inherent risk of related parties and non routine transaction. These all risks have likelihood of material misstatement in the financial report of the company. As per auditing standard ASA 300.05, it is required by the auditor to make the adequate planning before performing the audit (Arens, 2010,
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