Business risk is defined in AU-C 315.04 as “a risk resulting from significant conditions, events, circumstances, actions, or inactions that could adversely affect an entity's ability to achieve its objectives and execute its strategies or from the setting of inappropriate objectives and strategies” (AICPA, 2021).

Identify and describe the impact of two characteristics of a gig companies' internal environment on engagement planning and assessment of client business risk. Does the characteristic increase or decrease your assessment of risk? Describe the potential impact of the risk (i.e., what could go wrong). For internal characteristics, consider the nature of the entity including the nature of revenue sources, key assets, revenue recognition practices, ownership/capital structure, planned shifts in capital structure, personnel, etc.

Answer rating: 100% (QA)

Answer Explanation Impact of two characteristics of a big companies internal environment on engagement planning and assessment of client business risk iThe auditor should perform risk assessment proce... View the full answer