Which of the following is not a reason why an auditor obtains an understanding of internal controls?
A) Understanding the entity's internal control is a requirement of GAAS.
B) The auditor must use the information to assess the risk of material misstatements arising from the lack of internal control.
C) It is the primary basis for the audit report.
D) It assists the auditor in designing the nature, timing and extent of further audit procedures.

Question

Quizplus · Accepted Answer

While an understanding of internal controls is necessary for the auditor to design appropriate audit procedures and assess risk, it is not the primary basis for the audit report. The primary basis for the audit report is the auditor's opinion on whether the financial statements are presented fairly in all material respects.

Which of the Following Is Not a Reason Why an Auditor