Business risk Vs Audit risk

Business Risk	VS	Audit Risk
Is a risk that a company cannot generate adequate income to cover the expenses and that could hinder the hinder the achievement of company goals and objectives.	Definition	Is a risk that an auditor giving opinion based on financial statement which is inappropriate.
·         Strategic Risk          ·         Financial Risk          ·         Operational Risk          ·         Reputation Risk	Type of Risk	·         Inherent Risk ·         Control Risk ·         Detection Risk
Identify by management	Responsible Personal for Risk Identification	Identify by internal and external auditor
Review continuously due to its recurring nature.	Review of risk	Review at the time of preparing audit reports.

Business Risk

1.    Strategic Risk

·         Totally is making poor business decisions that affect the core of business activity. Change in customer tastes and preferences are the main strategic risk businesses can face which makes the company’s products and services obsolete or less desirable.

2.    Financial Risk

·         Poor in fund management which regarding on cash deficits, granting credit periods to customers, obtaining credit periods from suppliers, and  company's cash flow cannot  meet its financial obligations.

3.    Operational Risk

·         Can be result in internal event or external event inefficiencies and failures in the production floor. Internal event such as production delays, breakdowns in internal procedures, people and systems. For the external event such as supplier delays in delivering raw materials.

4.    Reputation Risk

·         This is the risk resulting from loss of image of the company through customer complaints, negative publicity, and product failures.

Audit Risk

1.    Inherent Risk

·         Is the risk of a material misstatement in the financial statements arising which error or omission as a result of factors other than the failure of controls. Inherent risks occur when transactions are complex, or in situations that require a high degree of judgment in regards to financial estimates.

2.    Control Risk

·         Is the risk of materially misstating in the financial statements caused by the lack of or failing of relevant controls in operations of the business. Internal controls and checks and balances must be in place to prevent and alert issues of error or fraud. Control risk will arise when the internal controls are not adequate.

3.    Detection Risk

·         Is the risk that auditor fail to detect material misstatements relating to an assertion in an entity's financial statements through substantive tests and analysis. Detection risk can be reduced by auditors by increasing the number of sampled transactions for detailed testing.

External Auditor vs Internal Auditor

“check ... ✔.... check and ✔”this is or probably what will sound like when those auditors doing their task.

For me , initially when talking about auditor I always thought 💭 that auditor is those who are always checking🔍and investigating📃 the accountants' works which made the accountant's life more miserable. I never knew that there are 2 type of auditors until my lecturer told me so😂 which is Internal auditor and external auditor. So to differential both of them ,this is what I get when I done my research （thanks GOOGLE！🙌）

Internal  Auditor	VS	External Auditor
Examine issues of company business practises and risks.	OBJECTIVE	Examine the financial records and issue an opinion based on the financial statements of the company.
Hired by the company management	APPOINTMENT	Hired by the shareholder of company
NO	CPA REQUIREMENT	YES
Company Management	RESPONSIBLE FOR	Company Shareholder
Free to use any type format	FORMAT OF REPORT	Must use specific formats
From operation by professionalism and status	INDEPENDENCE	From company via statutory rights
Continuous Process	PERIOD	quarterly or annual
Operational Efficiency	CHECK	Accuracy and Validity of Financial Statement
Salary	REWARD	Fee
No	RIGHT OF MEETING WITH SHAREHOLDER	Yes

So to cut it short , we can conclude that internal auditor is like those who patrol 🚓 in the organization to supervise all employees whether they obey and follow the company's rules and regulations (AKA just like a 24 hours CCTV📹that 👀 every single corners in company🏢). Meanwhile, an external auditor is a outsider from the company where been hired as inspector🔍and detective👮 to check and verify the company financial report plus detecting whether is there any possible fraudulent activities been occur or not. 

Auditor 🔍 vs Accountant 📃

Now for most of the people they will think both accountant and auditor have the similar working environment where they have to work from  🕘 to 🕔 in the boring office handling thick old financial report 📃with the ironed black and white formal suit👔. Well, after what I have learn... Yes, both of them may have similarities in small part but mostly they didn't (hey ,even their spelling also different right 😂）And the following are what I can summarized about both accountant and auditor. 

Accountant	TOPIC	Auditor
record day-to-day financial transaction of the company and provide the financial statement at the end of the year to the external and internal user to making decision	DUTY	reviewing the financial statement that provide by accountant to verify the accuracy of the accountant’s work.
Accountants have their office in the company which they need work from 9-5.	WORK SPACE	Auditors travel and move around from company to company frequently.
Accountants perform their duties based upon their task	WORK BASIS	Auditors do their task completely based upon accountant's work.
International accounting standards such as IFRS	STANDARD	Auditing standards such as  IFAC
Accountants do not need to submit any report about their work.	REPORT	Is compulsory for auditor to submit the report as their task
Daily from the start till the end of the accounting period	PERFORMANCES	Perform quarterly or annual where when the financial statement are all done by those accountant
Yes	REQUIREMENT IN THE COMPANY	No
The starting point of Accountant’s salary is higher than Auditor’s,	SALARY	While the auditor’s is lower than Accountant’s
Slower & lower than auditors	GROWTH OF SALARY	More frequent and higher than accountant
NO	REQUIREMENT OF PROFESSIONAL LICENSE	YES
no independent where they are the employee of the company	INDEPENDENCE	Auditor is an independent body where they are external body

       
          In short,Accountant is a NEED which is required in a company, however the Auditor is a WANT which is an option whether to hire in the company. however, both must be good with number where they need to be quick and confident with what they do. To be an auditor or an accountant, it all depend on your interest and personality where if you like to do recording, summarizing and analyzing then you should lean toward the accountant dream while if you are detective-minded where you like to investigate other people work like Sherlock Holmes and love to take challenge then an auditor you should be.