Which of the following audit phases would generally be conducted before all of the others listed below?
A) Auditing business processes and related accounts.
B) Evaluation of audit evidence.
C) Gaining an understanding of the auditee's industry.
D) Consideration of internal control systems.
Answer: C) Gaining an understanding of the auditee's industry.
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Which of the following is true of available-for-sale (AFS) investments?
A) They are always reported as current assets in the balance sheet. B) They are always reported as long-term assets in the balance sheet. C) They are reported as current assets on the balance sheet only if the business expects to sell them within the first two years. D) They are reported as long-term assets on the balance sheet only if they are planned to be held for longer than a year.
A material item is one that is likely to affect a user's decision
Indicate whether the statement is true or false