#33 Risk-based audit 2

One of the argument for risk-based audit is: it is more cost efficient to focus on the risky area, rather than the traditional way. The traditional 'bottom-up' approach test almost all the details of the business, and almost every aspect of the businesses are covered (audited).

Whereas, the risk-based only focus on the risky area identified by the auditors.

#31 Weakness of Risk-based audit 1

Nowadays, the audit firms, including the Big 4 in the world adopt an top-down audit approach, so called 'Risk- based audit'. The deemed high risk areas (account) are the focus of the auditors ? Only minimal work will be done for the less-risky area.

However, the problem is auditors are the one who use the professional judgement to justify what area are risky. And, auditors might fail to identify the risky area of the business. Hence, no works were done for the risky area of the business!