Rio Tinto Ltd 2 Table of Contents Page no. I.Executive Summary2 II.Introduction3 III.Background3 IV.Inherent Risks4 V.Controls7 VI.Detection Risk9 VII.Analytical procedures9 VIII....

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Rio Tinto Ltd 2 Table of Contents Page no. I.Executive Summary2 II.Introduction3 III.Background3 IV.Inherent Risks4 V.Controls7 VI.Detection Risk9 VII.Analytical procedures9 VIII. Conclusion12 Appendix13 References18 I. Executive summary · Purpose of the Report · Risk addressed in the report · Findings · Recommendations II. Introduction III. Background - gaining an understanding of the client. The purpose of this procedure is to assess the risk that the financial report contains a material misstatement due to: · the nature of the client’s business · the industry in which the client operates · the level of competition within that industry · the client’s customers and suppliers IV. Inherent Risk and uncertainty According to ASA 200 “The risks of material misstatement at the assertion level consist of two components: inherent risk and control risk. Inherent risk and control risk are the entity’s risks; they exist independently of the audit of the financial report”. · Fraud risk · Going concern · Corporate governance · Information technology · Role of risk assessment from an auditor perspective Audit objectives ASA 300.4 the objective of the auditor is to plan the audit so that it will be performed in an efficient and effective way. Why plan (Auditing Standard ASA 315, 2015). What information for risk assessment the risks ASA 315.11 a. Relevant industry, regulatory, and other external factors and the applicable financial reporting framework. (Ref: Para. A25-A30, ASA 315.11) b. The nature of the entity, c. The entity’s selection and application of accounting policies, including the reasons for changes thereto. (Ref: Para. A36, ASA 315.11). d. The entity’s objectives and strategies, and those related business risks that may result in risks of material misstatement (Ref: Para. A37-A43, ASA 315.11)”. Audit Risk Model V. Control VI. Detection risks VII. Analytical procedures ASA 520.4 defines analytical procedures as the “evaluations of financial information through analysis of plausible relationships among both financial and non-financial data. Analytical procedures also encompass such investigation as is necessary of identified fluctuations or relationships that are inconsistent with other relevant information or that differ from expected values by a significant amount.” (Australain Auditing Standard ASA 520, 2009). VIII. Conclusion Appendix Profit & Loss statement Balance Sheet Cash Flow statement Ratio Analysis References