Which of the Following Is Not a Reason Why an Auditor

question 23

Multiple Choice

Which of the following is not a reason why an auditor obtains an understanding of internal controls?

• A) Understanding the entity's internal control is a requirement of GAAS.
• B) The auditor must use the information to assess the risk of material misstatements arising from the lack of internal control.
• C) It is the primary basis for the audit report.
• D) It assists the auditor in designing the nature, timing and extent of further audit procedures.

---

Definitions:

Product Leadership

A competitive strategy focused on innovation and the development of superior products or services, emphasizing quality, performance, and features to gain market leadership.

New Product

A good, service, or idea that has not previously been made available to the market by its creator.

Future Demand

The projected desire or need for a product or service in the coming period, based on current trends and data.

Profitable Business

A company or enterprise that generates more revenue than it spends in costs, leading to a positive financial gain.