The auditor begins selecting controls to test by _______.
A)asking management which controls they would prefer the auditor to test
B)checking the same controls as the prior year
C)by understanding the entity and the business and determining the risk of material fraud or error at the financial statement level
D)by understanding the entity and all other industries and determining the risk of material fraud or error at the financial statement level

Question

Quizplus · Accepted Answer

The auditor should begin selecting controls to test by understanding the entity and the business and determining the risk of material fraud or error at the financial statement level. This approach ensures that controls are tested based on the specific risks of the entity, rather than relying on past practices or management's preferences.

The Auditor Begins Selecting Controls to Test by _______