This assignment is a research component within the Auditing Practice assessment. There is no model answer to this assignment. You need to conduct desk research and based on this and any anecdotal evidence and/ or personal experience consider the questions given.
Inherent risk, in a financial audit, measures the auditor's assessment of the likelihood that there are material misstatements due to error or fraud in cycles before considering the effectiveness of internal controls.
Industry Sector of Interest
Consider the risks inherent to the retail industry such as grocery supermarkets and conduct research about the following questions.
1. List and describe the possible inherent risks in the retail industry. (20 marks)
2. Determine which inherent risks may currently be considered critical. (20 marks)
3. Determine which practices might address the inherent risk identified in’2’ above.