The auditor needs to understand the control environment (management and governance) because:
A) develop the overall audit plan.
B) management's ability to identify and respond to risk affects the risk of material misstatements in the financial report.
C) set materiality levels and assess acceptable audit risk.
D) all of the above

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The Answer of The auditor needs to understand the control environment (management and governance) because:
A) develop the overall audit plan.
B) management's ability to identify and respond to risk affects the risk of material misstatements in the financial report.
C) set materiality levels and assess acceptable audit risk.
D) all of the above

The Auditor Needs to Understand the Control Environment (Management and Governance)