Once the auditor has obtained an understanding of the inherent and fraud risks of material misstatement associated with debt obligations and stockholders' equity transactions, the auditor needs to understand the controls that the client has designed and implemented to address those risks.

Question

Quizplus · Accepted Answer

This statement is true. After understanding the risks associated with debt obligations and stockholders' equity transactions, the auditor needs to assess the effectiveness of internal controls in mitigating those risks.

Once the Auditor Has Obtained an Understanding of the Inherent