Which statement is true concerning the documentation of internal control?
A)Documentation should be sufficient to support the design and operating effectiveness of internal controls.
B)Documentation requirements are standardized by the PCAOB.
C)Documentation of disbursements requires paper and electronic documentation.
D)Documentation of all transaction controls should be tested on an annual basis.

Question

Quizplus · Accepted Answer

The documentation of internal control should be sufficient to support the design and operating effectiveness of internal controls. This ensures that the company has a solid foundation for their control processes.

B) is incorrect because there is no standardization of documentation requirements by the PCAOB.

C) is incorrect because not all documentation of disbursements requires paper and electronic documentation; this will depend on the company's specific policies and procedures.

D) is incorrect because the frequency of testing transaction controls will depend on the company's risk assessment and control environment. There is no one-size-fits-all answer for how often these controls should be tested.

Which Statement Is True Concerning the Documentation of Internal Control