An auditor should obtain sufficient knowledge of an entity's information system relevant to financial reporting to understand the:

Question

Quizplus · Accepted Answer

Choice "B" is correct. An auditor is responsible for evaluating the reasonableness of significant accounting estimates made by management. An entity's information system may affect the quality of such estimates and therefore should be considered by the auditor. Choices "A", "C", and "D" are incorrect. Control activities such as those designed to limit access, ensure proper authorization, and discover fraud are not directly related to the information system relevant to financial reporting.

An Auditor Should Obtain Sufficient Knowledge of an Entity's Information