An auditor is required to obtain a sufficient understanding of internal control to plan the audit. This requirement encompasses obtaining an understanding of the control environment, the accounting system, and the control policies and procedures. The emphasis could also be on the application of qualitative and materiality related threshold in case of likely misstatements. Enron was one of the classic fraud cases you have covered in the course which was full of material misstatements. Required:

Discuss the quantitative risk model risk in detail and justify the application for Enron that you could have done differently being an Auditor.