Which of the following statements is correct concerning the understanding of internal control needed by auditors?
A)The auditors must understand the information system,not the accounting system.
B)The auditors must understand monitoring and all preliminary accounting controls.
C)The auditors must have a sufficient understanding to assess the risks of material misstatement.
D)The auditors must understand the control environment,risk assessment,and all control activities.

Question

Quizplus · Accepted Answer

Auditors need a sufficient understanding of internal controls to assess the risks of material misstatement in the financial statements. This understanding helps them plan the audit by determining the nature, timing, and extent of audit procedures.

Which of the Following Statements Is Correct Concerning the Understanding