Short Essay – Article Example
Risks al Affiliation: Risks Telecommunication industry has been facing immense changes due to globalization which results from liberalization of markets, efficient flow of information, and integration of markets (Rittenberg, Schwieger, & Johnstone, 2008). In order to analyze inherent risks, one should consider the strengths of the internal controls. This is significant when assessing the client’s control risk. On the other hand, one should access the susceptibility of financial statements. Other factors that bring inherent risks include; prior-period misstatements, environment and external factors, and fraud. Therefore, I would incorporate these aspects for the next audit. This is to know whether my current audit helped the industry avoid these risks.
Control risks can be analyzed through comparing the planned work against the actual work (Rittenberg, Schwieger, & Johnstone, 2008). This involves analyzing the planned costs and the actual costs that have been used in the industry. This would provide me with the necessary information to understand the gaps that need to be closed in order to reduce the risks. As a result, I would ensure that the necessary controls are put in place in order to prevent any loss that can be controlled easily if detected in advance.
Detection risks occur mainly when the auditor fail to use the set procedures appropriately (Rittenberg, Schwieger, & Johnstone, 2008). Although detection risks cannot be eliminated completely, I would analyze them through identifying whether the procedures were followed effectively. In addition, I would analyze whether the results were interpreted effectively or whether the wrong audit methods were used. Once an issue is identified, I would ensure that the loopholes are sealed and the next audit incorporates this aspect. This is to enable the next auditors to assess whether the changes had an impact on the whole industry.
Rittenberg, L. E., Schwieger, B. J., & Johnstone, K. M. (2008). Auditing: A business risk approach. Mason, OH: Thomson/South-Western.