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Original Article

A hybrid decision support framework for planning a risk-based audit engagement

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Received 12 Oct 2023, Accepted 11 Jun 2024, Published online: 19 Jun 2024
 

Abstract

Internal audit engagement planning is a fundamental component of internal audit activities, and a poor plan can impair the audit quality. However, studies on internal audit engagement planning have limited exposure in the literature. To the best of our knowledge, a comprehensive and robust model has not been established to address the decision-making problems associated with the audit engagement planning process. To fill these gaps, an integrated multi-stage framework is presented for developing a risk-based audit engagement plan. The designed framework includes three stages to carry out the decision procedure. First, a combined method of best worst method and weighted probability-impact score is used to evaluate the risk exposure. Second, risk assessment results are integrated into the weighted multi-choice goal programming (WMCGP) model for selecting the audit scope and allocating budgeted audit hours. Third, WMCGP model assigns audit staff to the selected audit scope to satisfy auditor preference and fitness. Two real-life case studies illustrate that the proposed framework is a useful tool for selecting the critical audit scope and deploying appropriate resources. The research results outperform the manual procedures, enabling the audit team to use constrained resources more effectively and efficiently.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data that supports the findings of this study are partially included in this article. The complete data are available from the corresponding author upon request.

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