Final answer:
The answer is true; auditors must understand the internal control of a public company thoroughly to identify opportunities that could make the audit process more effective and efficient.
Step-by-step explanation:
If an audit client is a public company, the understanding of internal control must be sufficient to identify opportunities to increase audit effectiveness. The correct answer is 1) True. When auditing a public company, auditors are required not only to gain an understanding of the organization's internal controls but also to evaluate the effectiveness of those controls. This process is essential for planning the audit as it helps in determining the nature, timing, and extent of auditing procedures to be performed. By gaining a deep understanding of the internal control system, auditors can identify areas where the risk of material misstatement due to error or fraud is reduced, thus they can tailor their audit approach to be more efficient, potentially reducing the number of audit procedures and focusing on higher-risk areas.