ACTIVITY 6-AUDT2

1. Differentiate the Risk based audit and traditional audit

- A traditional audit would focus upon the transactions which would make up
financial statements such as the balance sheet. A risk-based approach will seek to
identify risks with the greatest potential impact. Risk-based auditing ensures that the
internal audit activity is focusing its efforts on providing assurance and advisory services
related to the organization's top risks.

2. Define Risk Management Framework

- Companies utilize the Risk Management Framework as a template and
guidance to identify, remove, and mitigate risks. It was created by the National Institute
of Standards and Technology to assist protect the United States government's
information networks. A risk management framework helps protect against potential
losses of competitive advantage, business opportunities, and even legal risks.