Auditors' understanding of the internal control in an entity contributes information for
A) Determining whether members of the audit team have the required competence and capabilities to perform the audit.
B) Ascertaining the independence in mental attitude of members of the audit team.
C) Planning the professional development courses the audit staff needs to keep up to date with new auditing standards.
D) Planning the nature, timing, and extent of substantive procedures on an audit.

Question

Quizplus · Accepted Answer

The auditors' understanding of the internal control in an entity is crucial for planning the nature, timing, and extent of substantive procedures on an audit. This is because a strong internal control system reduces the amount of substantive procedures that need to be performed, while a weak internal control system increases the need for substantive procedures. Therefore, option D is the correct answer. Options A, B and C are incorrect as they do not relate to the auditors' understanding of internal control.

Auditors' Understanding of the Internal Control in an Entity Contributes