When planning an audit of internal controls over financial reporting, the auditor needs a comprehensive knowledge of the company and its environment. This knowledge might include:
A) preliminary judgments about the results of operations.
B) assessments about the efficiency of operations.
C) conclusions about the effectiveness of internal controls.
D) an assessment of the effectiveness of the audit committee.
E) legal or regulatory matters of which the company is aware.

Question

Quizplus · Accepted Answer

Understanding legal or regulatory matters is crucial as they can significantly impact financial reporting and internal controls.

When Planning an Audit of Internal Controls Over Financial Reporting