Week 05 – Wrap up

Class Video: Week 05 – IT Risks and Controls

Class Slides: Week 05 – IT Risk and Controls

Risk Assessment Worksheet: Risk Assessment

This week we learned a few things about the concept of Risk and its relationship to audit and assurance. We learned that:

1. Risk is expressed as the product of its impact that the probability of it occurring (R=IxP)
2. Risk can be measured quantitatively and qualitatively, each having advantages and disadvantages
3. The measure of Risk will always have some level of subjectivity.

We also learned about:

• Inherent Risk
• Residual Risk
• Control Risk
• Detection Risk
• Sampling Risk… although this I mentioned in passing… we will get back to this when we talk about sampling.

For illustration purposes we went through a fairly simply exercise to quantify Risk using All World Airways as an example. We then used the same Risks and assessed them qualitatively.

We ended our session after a quick – very quick – introduction to Controls. Both Risk and Controls are very important so we will spend next week digging a little deeper into these.

Have a great week.