The level of understanding of a client's internal controls required is less than what is required for an audit of only the financial statements.

Question

Quizplus · Accepted Answer

For an audit of financial statements, auditors are required to understand the client's internal controls to plan the audit and determine the nature, timing, and extent of audit procedures. This understanding is crucial to assess the risks of material misstatement.

The Level of Understanding of a Client's Internal Controls Required