As an auditor at Comptrol Associates, conducting risk assessments is a vital part of my role. My team and I typically use auditing standards like ISA 315 to identify and assess risks of material misstatement in financial statements.
Here is an example: we once audited a manufacturing client who adopted a novel production method. We identified this as a significant change that could potentially impact operational and financial dimensions, and it was crucial to examine it closely. In the risk assessment process, we used tools like risk heat maps and control matrices to evaluate the production change's impact. The risk associated with this change was identified as 'high' due to potential production stoppages and increased operational costs.
Our risk assessment informed the auditing process, leading to a greater focus on areas impacted by the new production method. The assessment helped us offer sound recommendations to manage these risks, enhancing the client's strategic decision-making process.