> For the complete documentation index, see [llms.txt](https://engyon.gitbook.io/engyon/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://engyon.gitbook.io/engyon/training/training-english/module-4-knowledge-of-the-entity-and-its-environment-identify-irfs-and-creating-review-notes.md).
# Module 4: Knowledge of the entity and its environment, identify IRFs and creating review notes
The Knowledge of the entity and its environment procedures are designed to document the knowledge obtained about the entity and its environment within the engagement file. Based on this understanding, the relevant `Inherent Risk Factors` can then be identified.
The methodology package ensures that all relevant aspects are covered and prompts the audit team to add relevant inherent risk factors to the engagement where appropriate.
In this module, we will document insights about the entity based on the documents provided and then create inherent risk factors.
### Documenting Understanding of the Entity
1. Navigate to `Procedures` using the navigation menu and open the procedure `Knowledge of the entity and its environment` from the column on the left.
2. `Auditor` As the engagement partner, assign each audit team member to **one** of the procedure steps within `Knowledge of the entity and its environment` by clicking the assignment
icon next to the title of the procedure step. Remember to assign yourself as well.
3. `Everyone` Open the procedure step assigned to you.
4. Click the reference generation
button in the top-right corner of the screen and allow Engyon to search for references by reviewing the sources. This is part of Engyon’s automation and AI functionality.
For certain activities, references will be found. You can identify these by the paperclip icon
.
5. Using the generated references, write an explanation for an activity.Once your explanation has been saved, the Engyon logo
will appear next to `Explanation`.
6. Click the Engyon logo to request an `AI Review` of your explanation.
7. `Accept` or `Reject` the suggestion.
### Identifying Inherent Risk Factors
8. The objective of this procedure is to identify `Inherent Risk Factors`.
On the left-hand side of the screen, under `Context-Specific Information`, you will see the suggested inherent risk factors. These suggestions differ per procedure and, based on your understanding of the entity, you can decide whether or not to accept a suggestion.
> **Note:** Two inherent risk factors are added by default when an engagement is created. These can also be found on the `Risk Assessment` page:
>
> 1. Linked to the procedure `Business Activities and Industry Factors`.
> 2. Linked to the procedure `Fraud Discussion with the Client`.
9. Accept a suggested `Inherent Risk Factor` by clicking the accept
button, or create your own inherent risk factor by clicking the add button on the right-hand side
.
You can create an inherent risk factor by selecting a risk factor from the catalogue or by creating one `from scratch` without using a template.
A suggested inherent risk factor, or a risk factor selected from the catalogue, can still be edited so that the details are tailored to the entity.
1. When creating the inherent risk factor, you will see that an audit unit can be assigned. The same concept applies to processes, applications, risks, findings, and other data objects throughout the engagement.
10. Once you have created an `Inherent Risk Factor` within a procedure step, it will appear under `Context-Specific Information`.
The same also works the other way around: when viewing an inherent risk factor, you can see in the context of which procedure or procedures the risk factor was identified
### Creating Review Notes
11. Within all procedure steps, it is also possible to create `Review Notes`.
Click the review notes
icon in the top-right corner and then click `+ New note`.
12. Add a title to the review note and assign it to a colleague, so that it also appears in their `My List`.
13. You can find `My List` by going to your initials bottom left corner. This is a list of activitiets, procedures, review notes and file request that are assigned to you.
### Reviewing Identified Risk Factors
13. To view an overview of **all** identified `Inherent Risk Factors` in the engagement, navigate to the `Risk Assessment` page using the navigation menu on the left-hand side.