An auditor obtains knowledge about a new client's business and its industry in order to
A) Make constructive suggestions concerning improvements to the client's internal control.
B) Develop an attitude of professional skepticism concerning management's financial statement assertions.
C) Evaluate whether the aggregation of known misstatements causes the financial statements taken as a whole to be materially misstated.
D) Understand the events and transactions that may have an effect on the client's financial statements.

Question

Quizplus · Accepted Answer

The auditor obtains knowledge about a new client's business and its industry in order to understand the events and transactions that may have an effect on the client's financial statements. This understanding helps the auditor to select the appropriate auditing procedures to gather sufficient evidence to support their opinion on the financial statements.

An Auditor Obtains Knowledge About a New Client's Business and Its