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Risks

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Running head: SAMPLE AUDIT PROGRAM SAMPLE AUDIT PROGRAM: Name: Institution affiliation: Date: 1 SAMPLE AUDIT PROGRAM 2 Business Risk Analysis As per the PCAOB, the aim of an auditing process is to not only identify but also to assess risks of material misstatement (Auditing Standard No. 12, n.d.). Newham Company is a publicly traded company that manufactures cosmetic as well as body-care products. Therefore, the company faces a high risk of material misstatement. The risks faced by Newham, are similar to the business risks the company’s competitors i.e. Revlon and Avon have faces. Therefore in order for Newham to have a competitive edge it should ensure that the business do not impact the company negatively. The first risk Newham faces is the risk of having legal issues for not properly labeling & advertising their products. The PCAOB attributes the risk of material misstatement to a variety of sources that include external factors, such as company-specific factors, which encompass the nature of the company, its internal control over financial reporting and nature of the day to day company activities as well as the conditions in the company's industry and environment (Auditing Standard No.12, n.d.). Because of this risk, Newham should strive to ensure that its products are safe for public consumptions so as to avoid facing legal issues that are similar to those it is currently facing due to a selling new products, which had been improperly advertised resulting in alle ...
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