What determines the scope of an audit?

The scope of an audit is determined primarily by the number of work sites, employees, and industry activities involved in the audit process. This encompasses understanding the operational structure of the organization, including its geographical locations, workforce size, and the variety of services or products it offers. Each of these aspects impacts the complexity and breadth of the audit, as auditors need to evaluate different locations and activities that may carry varying levels of risk and compliance obligations.

Focusing on work sites allows auditors to assess whether specific regulations or standards are being met across different locations, while the size and variety of employees can influence how internal controls are implemented and monitored. Additionally, understanding the industry activities provides context regarding applicable regulations and industry-specific risks that need to be addressed during the audit.

In contrast, the number of stakeholders, size of the auditor’s team, and budget allocated for the audit can influence the audit's execution but do not fundamentally shape its scope. The scope is fundamentally about what areas and elements need to be covered to effectively assess the organization’s adherence to standards and risks associated with its operations.