Major standards mandate or strongly endorse risk-based planning, reflecting broad professional consensus.
While Risk-based auditing is a widely accepted, it is an effective approach when properly applied by skilled auditors who maintain professional skepticism, use good-quality information, and adapt procedures to identified risks.
It formalizes the use of auditor judgment and knowledge of the entity’s business, controls, and environment. Its effectiveness depends on the auditor’s competence, experience, and information quality; poor risk identification leads to missed issues.
its success hinges on the rigor of the risk assessment and execution.