Which of the following is true regarding management's documentation of internal controls?
A) Some documentation should focus on controls designed to detect fraud.
B) Documentation should focus on controls over the interim financial reporting process.
C) Documentation must be done on paper.
D) Inadequate documentation is usually considered an insignificant deficiency in internal control.

Question

Quizplus · Accepted Answer

Management's documentation of internal controls should include controls designed to not only ensure accuracy of financial reporting, but also to detect and prevent fraud. This is in line with the principles of the Committee of Sponsoring Organizations (COSO) framework for internal control. B is not necessarily true as documentation should cover all aspects of internal control, not just interim financial reporting. C is incorrect as documentation can be done electronically. D is incorrect as inadequate documentation can be a significant deficiency in internal control.

Which of the Following Is True Regarding Management's Documentation of Internal