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Hello everyone. I want to discuss two key elements of audit risk and how they made perfect sense while studying them. So inherent risk is the risk of misstatement assuming no controls are in place, while control risk is the risk of misstatement if the controls dont work. These are the two elements of audit risk that the auditor doesnt control, but are very important.
Again, there is Risk Management and Issue Management for a reason, the difference between an issue and a risk is not restricted to the timing, in other words, issues are not risks that have already happened. An issue is not risky, it is just something unfavorable. 2  It has little or no effect on the scope, the budget, and the schedule of the project. 3  A risk, on the other hand, can have drastic effects on the triple constraints if not managed properly.