When an auditor updates his or her understanding of the entity and its environment, _______.
A)each audit should be viewed identically to previous audits
B)each audit should be viewed independently from previous audits
C)each audit should be viewed with respect to the current audit of other clients
D)the auditor should be sure that senior management agrees with the auditor's understanding, and modify appropriately if not

Question

Quizplus · Accepted Answer

When updating their understanding of the entity and its environment, an auditor should view each audit independently from previous audits. This ensures that the auditor is not biased by previous knowledge or assumptions and that the current audit is thorough and complete in its evaluation of the entity's financial statements.

When an Auditor Updates His or Her Understanding of the Entity