The primary purpose for obtaining an understanding of the entity's environment (including its internal control)in a financial statement audit is
A) To determine the nature, timing, and extent of substantive procedures to be performed.
B) To make consulting suggestions to the management.
C) To obtain direct sufficient appropriate audit evidence to afford a reasonable basis for an opinion on the financial statements.
D) To determine whether the entity has changed any accounting principles.

Question

Quizplus · Accepted Answer

Obtaining an understanding of the entity's environment, including its internal control, is necessary to determine the nature, timing, and extent of substantive procedures to be performed. This helps ensure that sufficient appropriate audit evidence is obtained to afford a reasonable basis for an opinion on the financial statements. The other options (B, C, D) are not the primary purpose of obtaining an understanding of the entity's environment in a financial statement audit.

The Primary Purpose for Obtaining an Understanding of the Entity's