Don'ts R isk Assessment Do's and Don'ts Risk Defined Risk is the potential for loss to an enterprise due to error, fraud, inefficiency, failure to comply with statutory requirements, or actions which bring disrepute to the entity.
Risk is a synonym for all the adverse outcomes that the organization wishes to avoid.
Risk is a function of the probability that such consequences will occur, their magnitude, and their imminence. Risk Assessment Risk assessment is a process of estimating a riskiness coefficient or score to be associated with each auditable unit within the organization. Risk assessment is typically undertaken to focus attention on significant audit areas, to allocate scarce audit resources to the most important audit areas, and to help with key audit prioritizing decisions such as audit frequency, intensity and timing. These standards point out clearly that the riskiness of a specific auditable unit is only one of the key factors to be considered in establishing an audit coverage plan and schedule. A risk coefficient alone is not a sufficient basis for making appropriate audit planning decisions.