To assess the risk of material misstatement at the financial statement level,the auditor needs a detailed knowledge of internal control components relevant to financial reporting.

Question

Quizplus · Accepted Answer

This statement is true. In order to assess the risk of material misstatement at the financial statement level, the auditor needs to have a detailed understanding of the internal control components relevant to financial reporting. This is because effective internal controls provide a higher level of assurance that financial statements are fairly presented and free from material misstatements. The auditor must evaluate the design and implementation of the internal controls and determine whether they are operating effectively before making any conclusions about the risk of material misstatement in the financial statements.

To Assess the Risk of Material Misstatement at the Financial