The primary purpose of the auditors' study of internal control for a nonpublic entity is:
A) To provide constructive suggestions to the client for improving its internal control.
B) To report on internal control as required by Auditing Standard No. 5.
C) To identify and detect fraud and irregularities perpetrated by client personnel.
D) To determine the nature, timing, and extent of substantive procedures.

Question

Quizplus · Accepted Answer

The primary purpose of studying internal control in a nonpublic entity is to assess the risk of material misstatement and determine the nature, timing, and extent of substantive audit procedures.

The Primary Purpose of the Auditors' Study of Internal Control