How does the auditor gain an understanding of the entity and its environment? The auditing standards require the auditor to understand
A)industry,regulatory and other external factors that management deems relevant to the entity
B)the nature of the entity,including its operations,ownership and governance structures,the types of investments the entity makes,and the way the entity is structured and financed
C)management's selection and use of accounting policies,including any changes in these policies
D)management's objectives and strategies and the related business risks that may lead to the risk of material misstatement

Question

Quizplus · Accepted Answer

The auditing standards require the auditor to understand the nature of the entity, including its operations, ownership and governance structures, the types of investments the entity makes, and the way the entity is structured and financed.

How Does the Auditor Gain an Understanding of the Entity