MILLORA, ANGELO JAMES W.

9/30/20
BSAC – AAI AUDITG2(MWF 3-4)
WEEK 6 – DISCUSSION QUESTIONS
1. There are end to be considered that can help validate the engagement’s goals, and these include the
potential outcomes from the tests performed during the engagement, as well as the expectations of
the auditee in regards with the communications during the engagement. The importance lies in
identifying and anticipating the nature of, the deliverables to the auditee, and that the IA can design
tests to perform during engagements whilst expecting results from the same to be gathered for
support of deliverables and the engagement.
2. Task-oriented processes/behavior are those processes which mainly focus on tasks that are essential in
achieving a goal of some sort. With that in mind, these processes can have great impact on the
business and it opens up room for achieving goals for benefits. As goals are short-term, such processes
are very useful as they may create effective and efficient impacts that could help the business
eventually attain its own objectives. Strategic objectives begin where there are plans to attain the end-
goal.
3. Residual Risk is mainly that which comes after proper controls have been implemented for a past issue
that’s why management focuses on that, however, it may cause others to become complacent thus
disregarding the other risks in the business. There will always be factors that trigger different risks but
inherent risk, in relation with financial statements happen more often since the FS are created by
people too. Internal Auditors should consider any risk that may or may not come regardless of its
likelihood so as to be able to be prepared when the need arises. Since Residual Risk can be observed
through the assurance itself or by past experience, it is all the more adamant that the inherent risk be
taken notice when conducting the assurance engagements so as to avoid errors or problems.
4. When there is a lack of identification of key-process-level risks, it could result in a lack of amounts of
tests or the processes in the plan may not even be used, the auditor may not find potential or
important observations due to the lack thereof. On the other hand, when there is too many, it could
result in the usage of too many resources for the test of controls. Both scenarios are bad for the
company in general as it could trickle down, meaning, from the overall audit engagement and opinion
to the management decisions, could leave the company vulnerable and susceptible to different events
that could adversely affect the processes for reaching the objectives.
5. There is risk of internal controls or control placement becoming complacent due to an
implementation’s effectivity, as answered in Question 4, all risks should be considered even after such
implementation as there are tendencies of these risks affecting the company as a whole and
preventing the same from achieving its objectives. There is also the risk of malpractice or the risk of
unethical behavior other than those relating to the financial statements, such as those individuals that
hinder a company’s success.