Risks of material misstatement can arise from a variety of sources, including external FACTORS, such as conditions in the company's industry and environment, and company-specific factors, such as the nature of the company, its activities, and internal control over FINANCIAL reporting. For example, external or company-specific factors can affect the judgments involved in determining accounting estimates or create pressures to manipulate the financial statements to achieve certain financial targets. Also, risks of material misstatement may relate to, e.g., personnel who lack the NECESSARY financial reporting competencies, information systems that fail to accurately capture business transactions, or financial reporting processes that are not adequately aligned with the requirements in the applicable financial reporting framework. Thus, the audit procedures that are necessary to identify and appropriately assess the risks of material misstatement include consideration of both external factors and company-specific factors. This standard discusses the following risk assessment procedures:Obtaining an understanding of the company and its environment Obtaining an understanding of internal control over financial reportingConsidering information from the client acceptance and retention evaluation, audit planning activities, past audits, and other engagements performed for the company.Performing analytical proceduresConducting a discussion among engagement team MEMBERS regarding the risks of material misstatement.Inquiring of the audit committee, management, and others WITHIN the company about the risks of material misstatementExplanation:information for identifying and assessing risks of material misstatement of the financial statements associated with a company's financial relationships and transactions with its executive officers