Internal Audit Case Study

Risk Assessment - Nick

As part of the audit, we are required to perform risk assessment procedures. The risk assessment procedures are used to help gain an understanding of the entity, its environment, and its internal control. Through this understanding we can better assess the risks of material misstatement whether due to error or fraud. While risk assessment procedures alone are not sufficient evidence to support an audit opinion, they aid in determining the nature, extent, and timing of the audit procedures to be performed.

The risk assessment procedures to be performed are as follows:

· Obtain an understanding of the Company, its environment, and its internal control over financial reporting.

· Perform analytical procedures.

· Inquire of the audit committee, management, and others in the Company about
Overall, our procedures will not rely heavily on the internal audit department. However, we may rely on them to achieve a greater understanding of internal control and the operational flow of the Company.

The factors that influence the degree of reliance placed on the work of the internal audit department include the following:

· The assessed level of competence and objectivity of the members within the department.

· The materiality and risk associated with the account or control.

· The results of the assessment of the work performed by the department including the review of work programs and documentation of procedures.

As we conduct our planning and performance of the audit, we will ensure full and timely communication with the audit committee, management, and internal control department in regard to the need for any additional assistance from the Company in completion of the audit.

Use of Specialists -