Question

SA 315 requires understanding the entity and its environment, including internal control, to identify risks of material misstatement. A new auditor is engaged and starts with premises including: business processes, major transactions, organizational structure, IT systems, etc. Which of the following best captures the initial objective under SA 315?

A Decide fee structure
B Identify and assess risks of material misstatement through understanding internal control
C Write audit report
D Approve financial statements
E Evaluate staff facilities
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