Risk Dialog

Click the doormat icon () to open the Risk Doormat menu. The menu lists risks, controls and reportable items that have been defined. You can create, delete and edit a risk, controls or reportable items from this menu.

You can also remove risks, controls and reportable items in bulk by clicking the Delete (x) button to the right of the heading.

Risk Identification

New risk name

Type a short description of the identified risk.

Identifier

The identifier field is automatically populated with the user ID and a sequential number so that each risks, controls and reportable items are unique. This field can be enabled in the AO - General Options in the master template.

New risk description

Type a detailed description of the risk.

What Can Go Wrong

Type a description of the possible impact.

Source/Reference

The Source/Reference field is automatically populated when creating the risk from within a document.

Financial Statement Areas

Click to display a list of Entity level risks and material financial statements areas (FSAs). From the dialog, select one or more items that affect the identified risk. Once the relevant items have been selected, check off the related assertions within the Financial Statement Areas Affected area. As the material FSAs and assertions populate from the Financial Statement Areas worksheet, the worksheet must be generated before they can be selected.

Note: Any assertions that are not relevant to the FSA will be greyed-out.

Business Cycles Affected

Click to display a list of affected business cycles associated with the risk. The list in business cycles is defined in the Financial Statement Areas worksheet.

Note: If an FSA item in the Financial Statement Areas worksheet is already associated with a business cycle through the Financial statement areas worksheet, this area will be automatically filled out with the selection of Financial Statement Areas Affected.

Entities

In a consolidated file, select the applicable entity the risk relates to. This field can be enabled in the AO - General Options in the master template.

Inherent Risk Factors

Click to display a list of inherent risk factors. Select the applicable factors from the list and click OK.

Inherent Risk Factors Categories

Click to display a list of inherent risk factor categories. Select the applicable categories from the list and click OK.

Inherent Risk Factors Description

Click to enter a description for the inherent risk factors.

Significant Risk Indicators

Click to display a list of significant risk indicators. Select the applicable indicators from the list and click OK.

Procedures other than Substantive

Select to indicate if the risk requires procedures other than substantive.

Test of Controls

Select to indicate if the risk requires test of controls.

Likelihood to Occur

Select the likelihood of the risk to occur from a range of 1 (low) to 5 (high).

Monetary Impact

Select the monetary impact of the risk from a range of 1 (low) to 5 (high).

Inherent Risk

Select to rank the inherent risk as high, medium or low. If the template author enables the automation of Inherent Risks, the Inherent Risk is automatically assessed.

Control Risk

Select to rank the control risk as high, medium or low. If the template author enables the automation of Control Risks, the Control Risk is automatically assessed.

Potential RMM

Select to rank the potential RMM as high, medium or low.

Residual Risk

Select to rank the residual risk as high, medium or low.

RMM

Select to rank the RMM as high, medium or low. If the template author enables the automation of RMM, the RMM is automatically assessed.

Significant risk

This is automatically selected when a significant risk indicator is added to the risk.

Roll forward

Select to include the risk in the next year's file. This is automatically selected for new risks.

Management Response

Type the details of any response from management and any controls they have implemented to deal with the identified risk.

Risk treatment/mitigation

Conclude whether the risk has been mitigated by these controls.

Audit Response

Type the details of the detailed audit response that will respond to the identified risks and provide the evidence necessary to support the audit opinion. The detailed audit response would include the type of test that would be planned: test of control, specific procedure, substantive analytical procedure, or substantive sampling. If the template author enables the automation of Audit Responses, the Audit Response is automatically assessed.

Audit has properly addressed this risk

Conclude whether the risk has been addressed by the audit response.

Addressed

The Addressed field is automatically populated when an item is selected from the Financial Statement Area and that item has been linked to a document in the Financial Statement Area worksheet.

Control

Click beside Control, to add controls to the risk. The following choices appear:

• Create New (item) - opens the New control dialog to create a new control
• Import from File - imports controls from a template or other source file, using the import controls dialog.
• Edit Association - uses an existing control. A dialog appears that lists the controls that have already been added to this client file. From the dialog, select one or more controls to be associated with this risk.

This option is available only if you have enabled controls in the AO - General Options document.

Reportable Item

Click beside Reportable Item, to add reportable items to the risk. The following choices appear:

• Create New (item) - opens the New reportable item dialog to create a new control
• Import from File - imports reportable items from a template or other source file, using the import controls dialog.
• Edit Association - uses reportable items. A dialog appears that lists the reportable items that have already been added to this client file. From the dialog, select one or more reportable items to be associated with this risk.

This option is available only if you have enabled reportable items in the AO - General Options document.