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1. Describe 2-3 areas of auditing risk in a retail business one might feel do not have sufficient controls. Explain what risks the organization faces by allowing these items to continue in their current form.

2. Using the 2-3 risk areas identified in question #1, explain the control procedures you would recommend establishing to mitigate the risk. Go on to explain the audit process you would use to audit each of your proposed solutions.

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Describe 2-3 areas of auditing risk in a retail business one might feel do not have sufficient controls.

The two biggest risks in retail auditing are the two biggest operational functions/areas for retail stores.
1) their biggest asset, which is inventory, and
2) cash

Because inventory is their biggest (and many times, their only) asset, it is highly susceptible to audit risk. Inventory can easily be understated or overstated to cover theft, fraud, and simply even errors that the company does want to be discovered. In most settings, the biggest asset is the most vulnerable to fraud. The second area is cash, due to how readily cash is available in retail organizations.

Inventory and cash could never have enough controls to be considered ...

Solution Summary

Describe 2-3 areas of auditing risk in a retail business one might feel do not have sufficient controls. Explain what risks the organization faces by allowing these items to continue in their current form.

2. Using the 2-3 risk areas identified in question #1, explain the control procedures you would recommend establishing to mitigate the risk. Go on to explain the audit process you would use to audit each of your proposed solutions.

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