LO4-1: Define audit risk and describe how it can be broken down into the three separate components of the audit risk model to help assess and respond to such risks during the audit planning process.

LO4-2: Explain auditors' responsibility for fraud risk assessment and define and explain the differences among several types of fraud and errors that might occur in an organization.

LO4-3: Explain auditors' responsibility to assess inherent risk, including a description of the type of risk assessment procedures that should be performed when assessing inherent risk on an audit engagement.

LO4-4: Understand the different sources of information and the audit procedures used by auditors when assessing risks, including analytical procedures, brainstorming, and inquiries.

LO4-5: Explain how auditors complete and document the overall assessment of inherent risk and the special considerations given to fraud risks and noncompliance with laws and regulations.

LO4-6: Descibe the content and purpose of an audit strategy memorandum.