The auditor's understanding of internal control performed as part of risk assessment procedures provides the basis for the auditor's initial assessment of control risk.

Question

Quizplus · Accepted Answer

The auditor's understanding of internal control is an important factor in determining the risk of material misstatement, and it forms the basis for the auditor's initial assessment of control risk. This understanding is gained through risk assessment procedures carried out as part of the audit planning process.

The Auditor's Understanding of Internal Control Performed as Part of Risk