Audit Risk Assessment Tool-Step 1: Obtain an Understanding of Your Client and Its Environment e. Determine whether any of the risks identified are significant risks, one or more of which arises on most audits. Significant risks are those risks that require special audit consideration. In exercising professional judgment to determine whether a risk is a significant risk, you should consider i. the nature of the risk. ii. the likely magnitude of the potential misstatement, including the possibility that the risk may give rise to multiple misstatements. iii. the likelihood of the misstatement occurring. f. Document responses to risks identified, including responses to significant risks that require special audit consideration. Use the risk assessment worksheet to document (1) all risks at the assertion level, including significant risks, and (2) related responses to all risks, including special considerations for significant risks identified. g. Additional Comments: Add more documentation below, if necessary, to explain your rationale of why a risk was or was not identified. Enter text