I had a very interesting phone conversation this morning with Brian Barnier of ValueBridge Advisors. I met him at the IIA conference in Atlanta, where he was on a panel discussing risk. I asked him for more help in defining inherent risk - as I struggle with teaching that concept. Experienced practioners say that inherent risk is based on your gut. "Gut" is hard to teach.
The audit standards help us when it comes to control risk by providing the COSO model. But when it comes to inherent risk, they only say to 'consider magnitude and likelihood.' That is only mildly helpful. I asked Brian if he would point me to some risk resources that I could refer to in conducting my work and he said that there aren't any (ah ha... so I'm not crazy) but that he was writing one with the IIA. So now, we can wait the two years necessary for the IIA to come out with something to go off of.
In the interim - I'm not giving up my quest. And you might want to check out Brian on Risk TV. YES - Risk TV! at http://risk.mashnetworks.com/