Step 2 of the Planning Process Is the Risk Assessment

Multiple Choice

Step 2 of the planning process is the risk assessment phase.At this stage of the planning process the objective of the auditor is to identify and assess the risk of material misstatement.The auditor does this by

A) gaining an understanding of the company and its environment,including the company's internal controls
B) gaining an understanding of the company's industry,including the company's competition
C) developing an audit strategy to respond to the risk of material misstatement
D) determining risk assessment procedures to assess the risk of material misstatement at the financial statement and assertion level