Why is it important to obtain an understanding of the internal control system?
A)Weak internal controls may increase the risk of material misstatement.
B)To determine the level of inherent risk.
C)Because strong internal controls indicate management integrity.
D)All of the above.

Question

Quizplus · Accepted Answer

Understanding the internal control system helps identify areas where there may be a higher risk of material misstatement due to weak controls.

Why Is It Important to Obtain an Understanding of the Internal