Top-down audit approach
A top-down audit approach begins with the financial statements and entity-level matters, then considers significant accounts, disclosures, assertions and relevant controls in greater detail. It helps connect broad risks to targeted work, but the exact approach depends on the engagement and applicable standards.
Worked example
An auditor considers management override and entity-wide controls before identifying the accounts and assertions most exposed to the risk.
Common mistake
A top-down approach does not mean every account with a lower assessed risk requires no audit work.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AAA (INT) | Supporting | September 2026–June 2027 |