Which statement about internal controls is incorrect?
A) Internal controls encompass all of the elements of an organization.
B) Internal controls support the achievement of an organization's objectives.
C) Internal controls don't have to be understood if a totally substantive approach is adopted.
D) Internal controls comprise a key component of audit risk assessment.

Question

Quizplus · Accepted Answer

Internal controls are important to understand for auditors as they help in assessing the risk of material misstatement and designing audit procedures accordingly. A totally substantive approach neglects the importance of internal controls and may not be effective in ensuring the integrity of financial reporting.

Which Statement About Internal Controls Is Incorrect