Auditing risk based approach

In a purely risk-based internal audit plan, CAEs may apply one of two strategies to arrive at the ideal frequency of planned engagements

The audit plan may be based on a continuous risk assessment without a predefined frequency for engagements

A risk-based approach audit begins with an audit plan that focuses on risks

In this approach, auditors aim to address a company’s highest priority risks first

Traditional audit plans focus on processes or specific areas

Instead, the risk-based approach looks at auditing from a different perspective

It focuses on analyzing and managing risks

The difference is the focus on the scope of the audit procedures designed to achieve these goals, which is set through the risk assessment and audit planning processes