To identify the risk of material misstatement,the auditor considers material misstatements at
A)the financial statement level
B)the management assertion level
C)the relevant assertion level
D)the control risk level
E)A and C

Question

Quizplus · Accepted Answer

In order to identify the risk of material misstatement, the auditor needs to consider the relevant assertion level (i.e., individual account balances, transaction classes, and disclosures) as well as the financial statement level. Therefore, answer choices A and C are both correct. Control risk level (answer choice D) is a factor in determining the nature, timing, and extent of substantive procedures, but it is not directly related to the identification of material misstatements. Management assertion level (answer choice B) is too narrow a focus and is therefore not the best choice. Since both A and C are correct, E is the best answer.

To Identify the Risk of Material Misstatement,the Auditor Considers Material