In a compliance audit, the fieldwork step generally involves which activity?

In a compliance audit, the fieldwork step is primarily focused on collecting data and testing internal controls. This phase involves on-the-ground activities where auditors gather relevant information and evidence regarding compliance with policies, regulations, and standards. It includes reviewing documents, conducting interviews, observing processes, and testing transactions to assess whether internal controls are operating effectively.

The essence of fieldwork is to apply the audit criteria to real situations to identify any discrepancies, risks, or areas of non-compliance. By thoroughly analyzing the internal controls and corresponding data, auditors can provide a basis for their findings and conclusions that will later be detailed in the final report.

In contrast, developing audit criteria is typically done prior to fieldwork as part of the planning process, and drafting the final report occurs after fieldwork has been completed and findings have been analyzed. Conducting the initial meeting with management is an important step that usually takes place at the beginning of the audit process to outline the scope and objectives but is not part of the fieldwork itself. Thus, collecting data and testing internal controls is the critical activity that characterizes the fieldwork step in a compliance audit.