A primary objective of procedures performed to obtain an understanding of internal control is to provide an auditor with ________.
A)Knowledge necessary to assess the risks of material misstatements.
B)Evidence to use to assess inherent risk.
C)A basis for modifying tests of controls.
D)An evaluation of the consistency of application of management's policies.

Question

Quizplus · Accepted Answer

The primary objective of performing procedures to obtain an understanding of internal control is to provide the auditor with the knowledge necessary to assess the risks of material misstatements. This understanding of internal control is a critical component of the auditor's risk assessment process, which is used to design further audit procedures. Thus, option A is the correct answer. Option B is incorrect because procedures to obtain an understanding of internal control do not directly provide evidence to assess inherent risk. Option C is incomplete because audit procedures may be modified based on the understanding of internal control. Finally, option D is incorrect because evaluating the consistency of application of management's policies is not the primary objective of procedures performed to obtain an understanding of internal control.

A Primary Objective of Procedures Performed to Obtain an Understanding