In obtaining an understanding of an entity's internal control in a financial statement audit of a nonpublic company, an auditor is not obligated to:
A)determine whether the control activities have been placed in operation.
B)perform procedures to understand the design of the internal control policies.
C)document the understanding of the entity's internal control components.
D)search for significant deficiencies in the operation of the internal control.

Question

Quizplus · Accepted Answer

While an auditor is required to obtain an understanding of the entity's internal control, they are not obligated to search for significant deficiencies in the operation of internal control. However, if the auditor becomes aware of any control deficiencies during the audit, they have a responsibility to report them to the appropriate levels of management. A, B, and C are all obligations of the auditor when obtaining an understanding of the entity's internal control.

In Obtaining an Understanding of an Entity's Internal Control in a Financial