When the auditor assesses the likelihood of material misstatement in the financial statements,the auditor will use
A)risk assessment procedures.
B)procedures to obtain an understanding.
C)tests of control.
D)assessment of design effectiveness of controls.

Question

Quizplus · Accepted Answer

Risk assessment procedures are used by the auditor to assess the likelihood of material misstatement in the financial statements. These procedures involve obtaining an understanding of the entity and its environment, including its internal control, and assessing the risks of material misstatement based on the auditor's understanding of the entity and its environment. The other options listed are procedures that are used by the auditor to obtain evidence about the effectiveness of an entity's internal control, but they are not specifically focused on assessing the likelihood of material misstatement.

When the Auditor Assesses the Likelihood of Material Misstatement in the Financial