Auditors need to understand the relationship of business risk to the planning of an audit.
Required
a. Explain how the existence, or nonexistence, of a good risk management process by an organization affects the planning of an audit engagement.
b. What risks does a company have in developing and introducing a new product? Take the example of the process of introducing a new product in any industry that you are interested in and
(a) Identify the risks,
(b) Identify the controls that you would recommend to address those risks, and
(c) Identify the possible effect on the organization and the audit if the controls are not in place.
c. What is the relationship between risk and controls? In other words, is there a need for control if there are no risks?