Audit methodology is the set of rules and standards that auditors use to determine how and when they will audit an organization’s financial statements. Each company and accountant chooses their own audit methodology based on the risks involved in a company’s particular circumstances. The choice of a specific audit methodology may seem like an unimportant detail, but it can have a significant impact on the scope and outcome of an audit. Understanding the different audit methodologies helps you make an informed decision on which one is right for your organization.
A good understanding of internal control principles and risk assessment techniques enables auditors to evaluate whether management has designed appropriate controls to address specific risks. This article covers all you need to know about how to choose the right audit methodology for your organization.