The financial management process is important for auditors because of its role in helping to form expectations about financial statement results. To illustrate this concept, explain how an understanding of the controls and performance measures in place to manage the following risks impacts expectations about financial statement results (use Figures 13-6 and 13-7 to help answer this question):

Risks

a. Iniadequate cash flow

b. Excessive or unknown financial exposures

c. Unforeseen changes in market conditions which cause losses

d. Manipulation of financial reporting

e. Errors in financial reporting