Lesson: Audit Approach

In this lesson, Nick Palazzolo discusses the audit approach and how it varies depending on the state of internal control within a company. He walks through different scenarios based on the quality of internal controls and highlights how the auditor's strategy might change in response to the strength or weakness of these controls. With helpful visuals, he covers the concepts of audit risk, control risk, and detection risk while explaining the relationship between these risks and substantive testing, tests of controls, and analytical procedures. Additionally, he provides examples from authoritative literature to solidify comprehension of these foundational audit concepts and emphasizes the importance of understanding the balance between the various audit risks and procedures.