Risk response at the financial statement level is affected by _______.
A)the auditor's understanding of the auditor's control environment and the assessed risk of material misstatement due to fraud
B)the auditor's understanding of the entity's control environment and the assessed risk of material misstatement due to fraud
C)the internal auditor's system of internal control
D)the prior auditor's current assessment of audit risk

Question

Quizplus · Accepted Answer

Risk response at the financial statement level is influenced by the auditor's knowledge of the entity's control environment and the assessed risk of material misstatement resulting from fraud. This understanding allows the auditor to plan and perform procedures that will help in reducing the risk of material misstatement and ensure the financial statements are free from material misstatement. The other options (A, C, and D) are either unrelated or incorrect.

Risk Response at the Financial Statement Level Is Affected by _______