Question

Indicate whether the following statement true, it must always be true.) An auditor doesn't need to understand internal control to assess inherent risk. Risk of material misstatement (RMM) is risk at the auditor level. Preparing accurate financial statements is the responsibility of management. The audit of financial statements is a type of attest service.

Answer 1

1.False.anINHERENT Risk is a risk of materialmistatement that ariases due to errors or ommissins due to other factors other than the failure of internal controls.So this risk cannot be understand through failures of internal controls .this doesnot mean that he no need to understand internal controls.it is a subject matter of control risk

2.True.The risk of material mistatement is the risk inwhich financial satements are mistated to a material degree.this risk is pertained to the auditor level.he will asses the risk in 2 levels namely assertion level and financial statement level

3.true.Mangement is responsible for preparing financial staments of the company by following the appropriate accounting policies (including accounting estimates) and Principles of GAAP and folling the accounting standards applicable to the entity where as on the other hand auditor responsibility is to examine opinion on that they are showing true and fair view or not.

4. True.Attestation services may include compilations,Reviews,Audits or may agreed upon procedures.Generally CPA is the persons who expreses the opinion on such reluabilty subjectmatters