Risk assessment procedures include:

A) a required discussion among the staff members of the audit and the client regarding material misstatements in the financial statement.

B) determination of the type of audit opinion to issue.

C) observation of the entity's operations.

D) assessing acceptable audit risk.

Question

Business

Adonis Ellison

5 March, 16:44

Risk assessment procedures include:

A) a required discussion among the staff members of the audit and the client regarding material misstatements in the financial statement.

B) determination of the type of audit opinion to issue.

C) observation of the entity's operations.

D) assessing acceptable audit risk.

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Answers (1)

Know the Answer?

Kyla Green · Answer 1

The correct answer is C) observation of the entity's operations.

Explanation:

It is vitally important for the auditor to inspect the facilities of the plant and the offices of the company to be audited, in order to know their location, their operating conditions, the types of products that they distribute, the prevailing controls, etc.

During this phase, the auditor will observe the operations of the organization, emphasizing those of production and / or distribution in order to verify the way in which they are carried out to begin to enter the Internal Control knowledge and plan the methods of evaluation of it.