When an Auditor Is to Conduct an Audit of a Service

Multiple Choice

When an auditor is to conduct an audit of a service organization, what considerations should the auditor make in the planning stages regarding internal controls of the organization?

A) The auditor should assess the control risk before obtaining an understanding of internal controls.
B) The auditor should obtain an understanding of the entity's internal controls after performing substantive procedures.
C) The auditor should obtain an understanding of the effect of the user organization upon the service organization.
D) The auditor should be engaged to perform agreed-upon procedures.