Observation and inspection may provide the auditor with useful information to support the information obtained from management and other employees related to the risk of material misstatement.The auditor might observe or inspect
A)the entity's forecasts
B)documents,records and internal control manuals
C)decisions prepared by management
D)the entity's plans and office expenses

Question

Quizplus · Accepted Answer

Observing and inspecting documents, records, and internal control manuals can provide the auditor with evidence to support the information obtained from management and other employees related to the risk of material misstatement. The entity's forecasts and plans may not necessarily provide relevant information to the auditor, and decisions prepared by management are typically communicated to the auditor through other means, such as meetings or reports. Office expenses may also not be relevant to the auditor's assessment of the risk of material misstatement.

Observation and Inspection May Provide the Auditor with Useful Information