John, the audit partner in charge of Cash CPA Firm is discussing the concept of risk with a new audit intern, Sarah. Sarah explains that she understands what risk is, but doesn't understand why auditors would need to concern themselves with it. Which of the following represents John's best reply? Risk can really mean anything that stops the company achieving its operational and financial goals. Part of the auditor's job is to identify risks that may materially affect the client's financial statements. A major component of risk is the auditors risk of material misstatement, which is inversely related to control and detection risk. Risk is something that all auditors need to be concerned about. The only way that risk can be eliminated is through an effective audit. Part of what the auditors do toward the end of an audit is complete the risk assessment phase. This involves substantive testing and discussing risk with the client's major shareholders