Inherent Risk Essay

Inherent risk of infection Computerizing risk Non-routine proceeding (Beasley 2010, p268) Transactions that are unusual for the lymph node are more likely than routine transactions to be incorrectly recorded, beca using up of the client often lacks experience in recording them. Why it is risk Santos use a series of computerizing or IT technology to support their business for increase market competition. IT technology has been used for trade ordering systems between customs and Santos. Customers muckle order or purchase goods online.Therefore, non-routine transactions might occur if customers non familiar with the computerizing system. Whats more, Computerizing system would always make the same mistake, if the system has not designed properly. Thus, It might also contain some misstatement of transactions or increase opportunities that the transaction record incorrectly, such as , some of sales transactions might record in other income due to computerizing system design mistake. M isstatement of sales account would lead to estimate wrong actual profit at the end of financial year, thus it contain risks to estimate wrong also affect theEvidence Make sure that the computerizing system had been designed properly follow-up the computerizing system to identify whether there are some mistakes. Investigate sales account and other income account, identify whether every transaction has been recorded correctly. Management risk Factors related to ambidextrous financial reporting and misappropriation of assets (ASA 240 incentives/pressures) Adverse relationship between the entity and employees with access to cash or other assets susceptible to the theft whitethorn motivate those employees to misappropriate those assets, for xample promotions, compensation, or other rewards inconsistent with expectations. Management and weaknesses in internal control may be present when misstatement due to either fraudulent financial reporting or misappropriation. Why it is risk (ASA240 ) Asset misstatement or been record incorrectly due to motivation that theft could benefit from it. Weak heed of internal environment would lead to fraud or misstatement happened by personal motivation.