The Influence of the Business Risk-Based Auditing Application on the Audit Process: An Empirical Investigation in the Yemeni Context.

Abstract

This paper examines the impact of the modern audit approach, "Business risk auditing (BRA)," on the audit process. The cost of the BRA application and the impacts of this approach on the analytical procedures, internal controls, and audit evidence are the primary issues of this study. An empirical design using a structured questionnaire has been adopted to collect the data required to test the study’s hypotheses. The data was analyzed using the PLS-SEM technique, a hybrid of the partial least squares that is based on structural equation modelling. The study found that the high costs resulting from the BRA approach represent significant obstacles to implementing this methodology in the Yemeni audit context. However, auditors in Yemen believe that applying the BRA approach positively impacts the conduct of audits. The findings revealed a significant influence of the BRA approach on each audit procedure and audit quality in general. The present study has practical implications where it could raise the Yemeni auditors' awareness of the BRA approach, which is directly related to many International Auditing Standards (IAS). Therefore, BRA adoption will also assist in meeting ISAs' prerequisites. In addition to being the first study that looks at the advanced audit methods in Yemen, it is one of the few to examine the spread of BRA in developing nations.