Choice "D" is correct. The risk-based approach of the Single Audit Act is designed to focus the auditor's tests of federal financial assistance on the programs with the highest risk.
Choice "b" is incorrect. The risk-based approach does not focus the auditor on larger ("Type A") programs. Although the segregation of programs into larger ("Type A") and smaller ("Type B") programs gives the auditor a basis for determining coverage and evaluating risk, the focus is on the risk, not the size of the program.
Choice "a" is incorrect. The risk-based approach is not an extension of random sampling concepts and is not designed to provide each grant with an equal opportunity of being selected.
Choice "c" is incorrect. The risk-based approach is not an extension of random sampling or PPS sampling concepts and is not designed to provide each Federal dollar expended with an equal opportunity of being selected for testing.
