In the risk-based audit approach the control environment serves as the first line of defense in mitigating the risks that a company has to manage.

Question

Quizplus · Accepted Answer

In the risk-based audit approach, the control environment serves as the first line of defense in mitigating the risks that a company has to manage. This is because a strong control environment sets the tone for how the organization identifies, assesses, and responds to risks. By establishing effective controls, the company can prevent or detect risks before they escalate into significant problems. Therefore, the control environment is critical to ensuring effective risk management and is considered the first line of defense in mitigating risks.

In the Risk-Based Audit Approach the Control Environment Serves as the First