Understanding Entity Risks
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Questions and Answers

What does PSA 315 deal with?

  • Internal control deficiencies
  • Auditor's responsibility to identify and assess the risks of material misstatements (correct)
  • Preparation of financial statements
  • Auditor's communication with governance and management

    • What is the focus of PSA 265?

  • Preparation of audit reports
  • Communicating deficiencies in internal control (correct)
  • Understanding the entity and its environment
  • Assessing risks of material misstatement

    • What is the purpose of Phase I-C in M6: Understanding the Entity?

  • Evaluation of internal controls
  • Communication of audit findings
  • Preparation of financial statements
  • Performance of risk assessment procedures (correct)

    • What does PSA 265 require auditors to communicate?

    <p>Deficiencies in internal control</p> Signup and view all the answers

    What is the main focus of M6: Understanding the Entity?

    <p>Understanding the entity and its environment</p> Signup and view all the answers

    What is the main focus of PSA 315?

    <p>Identifying and assessing risks of material misstatement through understanding the entity and its environment</p> Signup and view all the answers

    What is the focus of PSA 265?

    <p>Communicating deficiencies in internal control to those charged with governance and management</p> Signup and view all the answers

    What does PSA 315 require auditors to do?

    <p>Identify and assess the risks of material misstatements in the financial statements</p> Signup and view all the answers

    What is the purpose of Phase I-C in M6: Understanding the Entity?

    <p>Performance of risk assessment procedures to identify/assess risk of material misstatement through understanding the entity</p> Signup and view all the answers

    What does PSA 265 require auditors to communicate?

    <p>Deficiencies in internal control to those charged with governance and management</p> Signup and view all the answers

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