An Auditor Is Required to Obtain an Understanding of the Entity's

Multiple Choice

An auditor is required to obtain an understanding of the entity's business, including business cycles and reasons for business fluctuations. What is the audit purpose most directly served by obtaining this understanding?

A) To enable the auditor to accurately identify significant deficiencies in internal control.
B) To assist the auditor in accurately interpreting information obtained during an audit.
C) To allow the auditor to more accurately perform tests of controls.
D) To decide whether it will be necessary to perform analytical procedures.