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

The auditor is not obligated to search for significant deficiencies in the operation of the internal control. However, if the auditor becomes aware of any significant deficiencies during the audit, they are required to report them to management and include them in the audit report. A, B, and C are obligations of the auditor in obtaining an understanding of an entity's internal control in a financial statement audit of a nonpublic company.

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