Major advantage of risk based approach for audit planning is:
A. A. Audit planning can be communicated to client in advance. B. B. Audit activity can be completed within allotted budget. C. C. Use of latest technology for audit activities.Â D. D. Appropriate utilisation of resources for high risk areas.
D. Appropriate utilisation of resources for high risk areas.
The risk-based approach is designed to ensure audit time is spent on the areas of highest risk. The development of an audit schedule is not addressed by a risk-based approach. Audit schedules may be prepared months in advance using various scheduling methods. A risk approach does not have a direct correlation to the audit staff meeting time budgets on a particular audit, nor does it necessarily mean a wider variety of audits will be performed in a given year.