The auditor's understanding of internal controls provides the basis for designing appropriate audit tests to be used in the remaining phases of the audit.

Question

Quizplus · Accepted Answer

The auditor's understanding of internal controls is crucial for designing audit tests that will effectively evaluate the effectiveness of a company's internal controls. Without a solid understanding of the company's internal controls, the auditor may not be able to identify areas of potential risk and may not be able to design appropriate audit procedures to address those risks. Therefore, the auditor's understanding of internal controls is essential for designing appropriate audit tests in the remaining phases of the audit.

The Auditor's Understanding of Internal Controls Provides the Basis for Designing