The third step of performance responsibility standard in the financial statement audit using a risk assessment approach is to
A)identify risks of material misstatement.
B)determine and apply materiality levels.
C)evaluate audit evidence.
D)ensure adequate planning and supervision.

Question

Quizplus · Accepted Answer

The third step of the performance responsibility standard in a financial statement audit using a risk assessment approach is to identify risks of material misstatement. This involves understanding the client's business and industry, assessing risks associated with the financial statements, and identifying potential areas of misstatement. This step helps auditors to focus their audit procedures on areas of higher risk, where there is a higher likelihood of material misstatement.

The Third Step of Performance Responsibility Standard in the Financial