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    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 Correct Answer Incorrect Answer
    B Identify and assess risks of material misstatement through understanding internal control Correct Answer Incorrect Answer
    C Write audit report Correct Answer Incorrect Answer
    D Approve financial statements Correct Answer Incorrect Answer
    E Evaluate staff facilities Correct Answer Incorrect Answer

    Solution

    β€’ SA 315’s core requirement is risk assessment via comprehensive understanding of internal controls.

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