Audit and Assurance Systems

Audit and Assurance
systems

TABLE OF CONTENTS
REFERENCES...........................................................................................................................7

To,
Bank of Montreal
Business information and risk assessment
Business information
Bank of Montreal is the North America’s 8th largest bank by assets serves the
customers over 12 million through its integrating operating groups. It’s revenue for the year
ended 2019 is US $22774 and the net income is US $5758. The company has not missed
paying dividend since 1829 even in the global crisis it has paid its dividend. It has three client
groups, which are, personal and commercial Client group, investment banking group and the
private client group.
Risk assessment
There are four types of risk for risk assessment which are stated below.
Audit risk: The company has made an assumption in respect to the inherent risk (IR) in
respect to recording of transaction, forecasting etc. and has a Risk Taxonomy is maintained
for identifying the risks and inherent risk of BMO is stable or low. Also, the control risk of
BMO is lower as the accounts are handled by the highly experienced people. The detection
risk of the BMO is little high as because of using the sampling approach for the audit of large
data.
AR = IR × CR × DR
Business risk: Under this, the environment in which BMO is operating will be evaluated
along eth factors affecting it.
Engagement risk: It accounts for the overall risk in relation to the risk assessment. The
auditor works on preventing, detecting or correcting the material misstatements in the client’s
financial statements.
Analysis of internal controls and relationship to risk
The internal control is put in place by the BMO along with the significant amount of
risk issues can also be reviewed Enterprise risk and portfolio management. The company has
established the internal control as per the risk management framework. In terms of business