Risk Based Approach Flashcards
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Risk based approach
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Risk-Based Approach to Auditing
Modern auditing employs a risk-based approach, focusing on high-risk areas. Here’s an overview:
Key Steps
1. Risk Identification and Assessment: Auditor identifies and assesses main business risks (ISA 315).
2. Audit Strategy and Planning: Auditor prepares an overall audit strategy and plan (ISA 300).
3. Responding to Assessed Risks: Auditor designs and implements responses to assessed risks (ISA 330).
Objective of ISA 330
Gather sufficient, appropriate audit evidence about assessed risks of material misstatement by designing and implementing effective responses to those risks.
