During financial statement audits,the auditors' consideration of their clients' internal control is integral to both assess the risk of material misstatement and to:
A)Assess inherent risk.
B)Design further audit procedures.
C)Assess compliance with the Foreign Corrupt Practices Act.
D)Provide a reasonable basis for an opinion on compliance with applicable laws.

Question

Quizplus · Accepted Answer

The auditors' consideration of their clients' internal control is necessary to design further audit procedures and to gather sufficient evidence to support their opinion on the financial statements. The assessment of inherent risk is based on the auditors' understanding of the business and industry, and the risk of material misstatement is evaluated based on both inherent and control risks. Assessing compliance with the Foreign Corrupt Practices Act and providing a reasonable basis for an opinion on compliance with applicable laws are not the primary objectives of considering internal controls during financial statement audits.

During Financial Statement Audits,the Auditors' Consideration of Their Clients' Internal