The auditor should obtain a sufficient understanding by performing risk assessment procedures to:
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A. B. C. D.B
The primary objective of performing a risk assessment procedure is to enable the auditor to identify and assess the risks of material misstatement in the financial statements due to fraud or error. This allows the auditor to plan and perform audit procedures that are appropriate in the circumstances.
Option A states that the auditor should obtain a sufficient understanding by performing risk assessment procedures to evaluate the design of controls not relevant to the audit of financial statements. This option is not correct because the auditor's focus should be on evaluating the design and implementation of controls that are relevant to the audit of financial statements, not controls that are not relevant.
Option B states that the auditor should obtain a sufficient understanding by performing risk assessment procedures to determine whether the design of controls has been implemented. This option is partially correct because understanding the design of controls is only part of the process. The auditor must also determine whether those controls have been implemented and are operating effectively to achieve their intended purpose.
Option C states that the auditor should obtain a sufficient understanding by performing risk assessment procedures to both evaluate the design of controls not relevant to the audit of financial statements and determine whether the design of controls has been implemented. This option is incorrect because, as mentioned earlier, the auditor's focus should be on evaluating the design and implementation of controls that are relevant to the audit of financial statements.
Option D states that the auditor should obtain a sufficient understanding by performing risk assessment procedures for neither evaluating the design of controls not relevant to the audit of financial statements nor determining whether the design of controls has been implemented. This option is incorrect because, as explained earlier, the auditor must assess the risks of material misstatement due to fraud or error and evaluate the design and implementation of controls that are relevant to the audit of financial statements.
Therefore, the correct answer is option B - the auditor should obtain a sufficient understanding by performing risk assessment procedures to determine whether the design of controls has been implemented.