Tag (SQ): Large Companies

What is the main justification for the use of a business risk approach to an audit of large companies?

A   A systems-based approach and a substantive testing approach are unlikely to detect material misstatements in the financial statements of large companies.

B   This approach forces the auditors to understand the client’s business in depth.

C   It is more effective than other approaches to audit in detecting deficiencies in internal control.

D   Major audit problems in large companies are more likely to result from business-related problems than from deficiencies in internal control.