Question

When a risk assessment process has been used to construct an audit engagement schedule, which of the following should receive attention first?

1) The highest risk areas
2) The lowest risk areas
3) The areas with the most controls
4) The areas with the least controls

Answer 1

In an audit engagement schedule constructed using a risk assessment process, the highest risk areas should receive attention first to maximize audit effectiveness.

Step-by-step explanation:

When a risk assessment process is employed in the construction of an audit engagement schedule, the areas that should receive attention first are the highest risk areas. Addressing the highest risks first ensures that the audit efforts are focused on the areas where potential for error or fraud is the greatest, thus maximizing the effectiveness of the audit. While areas with the most or least controls might also be indicative of risk, they are not the primary focus of attention; controls are instead one of the factors considered during the risk assessment process to determine the inherent risk level of different areas.

In an audit engagement schedule constructed using a risk assessment process, the highest risk areas should receive attention first to maximize audit effectiveness.