Risk-based auditing
Risk-based auditing uses identified and assessed risks of material misstatement to direct the nature, timing and extent of audit procedures. The auditor revises assessments and responses as evidence is obtained.
Worked example
The auditor increases work on a complex estimate after identifying high estimation uncertainty.
Common mistake
A high-risk approach does not mean ignoring required work on material classes of transactions or disclosures.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AA | Supporting | September 2026–June 2027 |