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A recurring theme throughout the IS audit process is basing your audit approach on risk It is important to fully understand the role that riskbased analysis has in the audit process because it is a primary differentiator in the exam question formats A candidate must use a risk-based approach to pass the exam, because many of the exam questions rely on the candidate s ability to understand the best solution based on risk It also should be used as the best practice for ensuring that the auditing you do is maximized in terms of value added to your employer and the organization being appraised by the audit process This is the definition of thinking like an auditor The purpose of an audit is to identify risks and to ensure that the residual risk (risk remaining after controls are applied) is acceptable to management.

An Internet development firm with an outstanding reputation is sold to an offshoot of a major U.S. corporation with one of Silicon Valley s real legends on the Board. The corporation gets the firm. The proprietor goes for an exceedingly valuable bundle of shares about to be floated on the U.S. Stock Exchange. The purchaser takes over the premises, staff, equipment, checkbooks, records, Intellectual Property Rights (IPR), and so on and then doesn t float.

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In the discussion about empty elements, we used the <img> tag, which included a name/value pair ( src = apple.gif ). Each name/value pair attached to an element is called an attribute. Attributes only appear in start tags or empty element tags. It has a name (src) followed by an equal sign, followed by a value surrounded in either single or double quotes. An element may have more than one attribute. Here is an example of an element with three attributes:

All activities in life have risk associated with them; some more than others We are constantly doing a risk analysis hundreds of times a day in the normal course of our lives If I push the speed limit will I get pulled over Should I try this new product on the grocery shelf or buy the same brand as I always have If I walk faster will I beat the traffic light at the corner All actions have risk associated with them It is the cost of doing any business at all Consequences are evaluated, the probability of loss is computed, risks are weighed, then a choice is made Auditing is not about eliminating risks It is intended to enable management to have a high level of confidence about what is going on If risks were not being taken, there would be no decisions being made.

A resource can be a Web page (an HTML or XML document) in whole or part, a collection of Web pages, and even objects that do not exist on the Web. This is similar to the notion of addressability in XTM; some objects exist in the real world and can only be indicated and not directly accessed. Resources are named by using a URI and can also include an optional anchor identifier. A property is a specific piece of information used to describe a resource. It can be an aspect, characteristic, attribute, or relation. These can mean different things to different people, so we won t try to distinguish these concepts here but will discuss them in the next chapter. A property of a resource will have a defined meaning and can have a defined range of acceptable property values (either simple enumerated types or more complex values), or they will simply relate to other resources and will typically have relationships with other properties. A property value can thus be another resource (again, identified by a URI) or a literal (a primitive XML data type or a simple string). A statement in RDF pulls resources, properties, and property values together. Statements are typically called triples though, as we shall see, they can also be viewed as graphs because they include a subject (the resource), a predicate/verb (the property), and an object (the property value or another resource). For example, the following is an RDF statement in XML serialization syntax:

Nothing would ever get done, which is not a good thing in a business process Another way to look at it is with a financial savings analogy The reason a high yield bond fund pays more interest in general is because the investor assumes a higher risk More risk, more reward No pain, no gain However you want to look at it, there needs to be risks taken in business to make money The businesses that manage their risks the best stand to be the most successful Managing risk could mean monitoring the situation with no additional control actions taken, or it could mean reducing controls because the risks do not warrant the extent of the controls currently being applied The old adage don t spend $100 to solve a $10 problem is what risk management is all about Sometimes it is through sheer luck that business profits are obtained.

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