Define Inherent risk. For a given account or accounting cycle, describe 3 factors that would influence your assessment of inherent risk and how you would measure each of the factors (e.g. how would you collect the information, how would you evaluate it?). Use 16 sentences or less.

(Factors : 1. Nature of the client's business

2. Results of previous audits

3. Initial vs repeat engagement: that auditor set a higher inherent risk in the first year of an audit and reduce it in the subsequent year as they gain more knowledge

4. Related parties risk

5. Fraud risk

6. Non-routine transactions or complex

7. Judgment/ estimates