> 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-6-risk-assessment-audit-risk-model.md).
# Module 6: Risk Assessment (Audit Risk Model)
The procedures within Initial risk Assessment are designed to analyse Inherent Risk Factors, document risks, and link them to Audit Units, Financial Statement Line Items, and Assertions.
In this module, you assess which risk factors are relevant to the audit and document which parts of the financial statements are affected. Engyon also supports the identification and documentation of fraud risk factors.
In this module, we will analyse inherent risk factors and link them to risks.
### Analysing an Inherent Risk Factor
1. Navigate to the `Risk Assessment` page left in your navigation bar.
> **Tip:** Procedures can also guide you to other pages within Engyon. For example, go to the procedure step `Team Discussion` within the `planning` phase. Then click the navigation button.
>
> Activity 1 asks you to discuss and, if relevant, create inherent fraud risk factors. You can do this by clicking `here` within the activity. This will also take you to the `Risk Assessment` page.
2. Click the title of the `Inherent Risk Factor` you created to perform the risk analysis.
3. First determine whether the inherent risk factor is relevant, meaning that it results in one or more risks.
If this is not the case, the risk factor can be marked as `Not Relevant`. You will then need to provide an explanation for why the risk factor is not relevant.
4. If the risk factor is relevant, it must be analysed further.
Start by determining whether it is a fraud risk factor. If so, click the relevant button within the `Risk Analysis` section on the right-hand side of the screen and select `Fraud Risk Factor` from the dropdown.
The `Fraud Triangle` will then appear and must be completed. Assess whether the inherent risk factor qualifies as a fraud risk factor.
5. Next, choose whether you want to link the inherent risk factor to one or more `Audit Units`. You can do this under Scope in the left corner.
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6. If desired, you can also link one or more `Assertions` directly.
To do this, click the pins on the left-hand side of the screen under `Scope`.
This step is optional, but it allows Engyon to assess more specifically whether the risk factor is fully covered by risks.
### Creating a Risk
1. Link a risk to the inherent risk factor by clicking the manage risk button.
2. Create a new `Risk`.
3. If desired, link one or more `Audit Units` and `Financial Statement Line Items` to the risk.
> **Tip:** The audit units linked to the `Inherent Risk Factor` must include at least the audit units linked to the risk.
> **Tip:** If assertions have been selected on the `Inherent Risk Factor`, you can only select those linked assertions when creating a risk. If no assertions have been selected on the inherent risk factor, all assertions remain available.
4. Select a `Financial Statement Line Item`.
Once a financial statement line item has been selected, you can choose from the assertions linked to the inherent risk factor.
5. If an inherent risk factor has been marked as a `Fraud Risk Factor`, the `Fraud Risk` toggle is automatically enabled and the linked risk is automatically classified as `Significant`.
6. Specify whether your inherent risk is Low, Medium, or High.
7. Create the risk.
8. Click the title of the risk you just created. This opens the detail screen for the newly created risk.
9. Within your risk assessment screen, you can modify the `Risk Analysis` and link `Internal Controls` Measures.
10. Enter the `Level of Risk`:
11. Return to the `Risk Assessment` screen on the left side of your navigation bar. Here you will find an overview of the risks that have been created, including Inherent Risk, Internal Control Risk, and Risk of Material Misstatement.