Narratives, flowcharts, and internal control questionnaires are three common methods of
A) testing the internal controls.
B) documenting the auditor's understanding of internal controls.
C) designing the audit manual and procedures.
D) documenting the auditor's understanding of a client's organizational structure.

Question

Quizplus · Accepted Answer

Narratives, flowcharts, and internal control questionnaires are all commonly used to document the auditor's understanding of internal controls. These methods help the auditor to identify the key control points, the flow of transactions, and potential weaknesses in the system. By documenting this information, the auditor can design an appropriate audit plan and determine the necessary tests of controls and substantive procedures.

Narratives, Flowcharts, and Internal Control Questionnaires Are Three Common Methods