Skip to main content

Use of Business Model In Audit Planning and Risk Assessment

- Business model shows customer value creation, key resources, key processes and profit formula (..reference..). 

- ISA 315 requires to understand the business environment and internal control of the entity, which leads to business risk and finally to business strategy

- business risk is derived from chances of failure on achievements of business strategy

- though primary concern of the auditor is audit risk and not business risk

- strategy however made by an entity, often, is vague, confidential in many cases and not much of use for the auditors 

- strategy often get too much concerned about external environment to match Opportunities with strength, if not to build strength for those opportunities 

- FS shows internal information except for some revaluations, and mark to market practices, under IFRS

- in such situations to document and to understand the environment (both internal and external) of an entity, business model can be the starting point

- business model shows how that business connect internal factors of production given state of technology with market dynamics or at-least how it plan to do so

- strategy is to fulfill that plan given by the business model 

- hence Business Model can be efficient and effective tool in Audit Planning and Risk Assessment processes


Comments

Popular posts from this blog

Hindu Jurisprudence- Smriti And some property law

I just don’t have the energy to write against the popular teaching (perhaps I have read the wrong books) that Hindu jurisprudence is contained within the Smriti, mainly the Manusmriti, and the property systems of the two schools — Mitakshara and Dayabhaga (I forget which region each school belongs to). But these are laws, not jurisprudence. I admit I do not know the subject of jurisprudence deeply — such a tragedy — but it seems to me these were laws made for the time and place according to the wisdom of the sages of that era. The Smriti writers themselves clearly said that the source of their understanding is the Veda. So, anyone who wants to understand exactly what truth Hindus hold must study the Vedas. Those who cannot may go through the Upanishads (major texts distilled by sages to teach the essence of the Jñāna part of the Veda). Those who still find that difficult may turn to the Mahabharata (which is in itself a “great battle” to understand), or they may study Mīmāṁsā, Nyāya-śā...

Sabda Bramha-Words are everything

They say Om is Sabda Bramha Vayu is Pratakshya Bramha I(Aatma) am Bramha I am the essence Sounds and letters ignite the mind They are capable of saying new things to mind Though not against Rit of the Bramhanda But they dont repeat they enlighten If that word be Om or Ram or Radha or Radhe or Bramha or Agni or Indra or Savita or ... No joy can match the joy of Naam Jap When emotion is so strong it lost itself in Mother then words may loose themselves But words no matter what are capable of carrying what is forgotten and what will one become etc. Title may demand more explanation - -- - -- - -- -

APPL Fama-French three factor model

This model is built purely for educational and illustrative purposes. It is a simplified implementation of the Fama-French 3-factor model applied to Apple's historical returns. The model has not been validated for investment, trading, or financial advisory use.