An example of an audit procedure that relates to the auditor's understanding of internal control is to
A)reperform the counting of physical inventory.
B)inspect documents and records.
C)recalculate the depreciation expenses.
D)trace all legal expenses to supporting invoices.

Question

Quizplus · Accepted Answer

Inspecting documents and records is an audit procedure that relates to the auditor's understanding of internal control. By examining these documents and verifying that they are complete, accurate, and valid, the auditor gains an understanding of the client's internal control processes to assess their effectiveness in ensuring validity and correctness of the financial statements. The other choices, such as reperforming counting of physical inventory, recalculating depreciation expenses, and tracing legal expenses to supporting invoices, address different aspects of the audit, such as testing the existence and valuation of assets, assessing the operational performance, and verifying compliance with legal requirements, respectively.

An Example of an Audit Procedure That Relates to the Auditor's