Which of the following is true about the auditors' consideration of internal control in a financial statement audit?
A)The auditors must assess control risk at a level lower than the maximum.
B)The auditors must prepare a flowchart description of internal control for their working papers.
C)The auditors must obtain an understanding of the steps in processing major types of transactions.
D)The auditors must perform tests of controls.

Question

Quizplus · Accepted Answer

Auditors are required to obtain an understanding of the entity's internal control, including the steps in processing major types of transactions, to assess the risks of material misstatement and design further audit procedures. This does not necessarily involve assessing control risk at a level lower than the maximum, preparing a flowchart, or performing tests of controls, although these actions might be taken depending on the auditor's judgment and assessment of risk.

Which of the Following Is True About the Auditors' Consideration