Which of the choices below best describes a risk-based audit approach?
A)A four-step approach to internal control evaluation.
B)A three-step approach to internal control evaluation.
C)A four-step approach to financial statement review and recommendations.
D)A three-step approach to financial statement review and recommendations.

Question

Quizplus · Accepted Answer

A risk-based audit approach typically involves a multi-step process focused on identifying and assessing areas of higher risk within an organization to determine the scope and focus of the audit. This approach is more aligned with a structured, stepwise evaluation of internal controls, which are designed to mitigate risks, rather than a specific number of steps in reviewing financial statements.

Which of the Choices Below Best Describes a Risk-Based Audit