ACCA Audit and Assurance (F8) Practice Exam 2025 – The Complete All-in-One Guide to Achieve Exam Success

The method involving inquiries of management and staff is a fundamental approach in assessing risk during an audit. Engaging in discussions with both management and staff allows auditors to gather insights into the internal controls, processes, and various operational aspects of the organization. This qualitative information helps auditors understand potential areas of risk that may not be readily apparent through numerical data alone.

Inquiries are particularly valuable because they can uncover management's perspective on risk areas, awareness of control deficiencies, and any changes in business operations or industry risks that could impact financial reporting. This dialogue can lead to a more comprehensive risk assessment, informing the auditor where to focus their efforts during the audit.

While the other methods listed can also contribute to risk assessment, they may not encompass the direct insights provided by direct inquiries. Focus groups and reviews might yield useful feedback, but they are generally not as direct or targeted as inquiries. Testing controls and substantive procedures are more about evaluating the effectiveness of controls and obtaining evidence rather than assessing risks. Board member interviews could provide valuable information but may not cover the day-to-day operations and risk environment as thoroughly as inquiries from a broader range of management and staff members.