During consideration of internal control in a financial statement audit of a nonpublic company,an auditor is not obligated to
A) Search for significant deficiencies in the operation of internal control.
B) Understand the internal control environment and the information system.
C) Determine whether the controls relevant to audit planning have been placed in operation.
D) Perform procedures to understand the design of internal control.

Question

Quizplus · Accepted Answer

While an auditor should evaluate internal controls, the extent of their assessment is dependent on the specific audit engagement and the risk factors involved. The auditor is not obligated to search for significant deficiencies or identify all potential areas of weakness in internal control. However, they should still understand the internal control environment and the information system, determine whether relevant controls have been put into operation, and perform procedures to understand the design of internal control.

During Consideration of Internal Control in a Financial Statement Audit