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what is the difference between inherent risk & business risk along with the examples?is there any relation between inherent risk and business risk?
Inherent risk, in auditing, is the risk that the account or section being audited is materially misstated without considering internal controls due to error or fraud. The assessment of inherent risk depends on the professional judgment of the auditor, and it is done after assessing the business environment of the entity being audited
Business risk – a definition! A company’s risk is composed of financial risk, which is linked to debt, and risk, which is often linked to economic climate. If a company is entirely financed by equity, it would pose almost no financial risk, but, it would be susceptible to business risk or changes in the overall economic climate.
Now, both of the above definitions were cut-and-paste from Wikipedia. If you need more than this, may I suggest you type “inherent risk” and ( separately ) “business risk” into your search engine!
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