Section 404 requires auditors to perform walkthroughs to assist in understanding internal control.

Question

Quizplus · Accepted Answer

Section 404 of the Sarbanes-Oxley Act (SOX) indeed requires auditors to perform walkthroughs to gain an understanding of a company's internal control system. The walkthrough process typically involves observing and documenting how the control procedures operate, identifying potential risks or weaknesses, and assessing whether the controls are designed effectively to mitigate those risks. The purpose of the walkthroughs is to obtain a comprehensive view of the company's internal control environment, which helps the auditor design and implement suitable audit procedures and evaluate the effectiveness of the control system.

Section 404 Requires Auditors to Perform Walkthroughs to Assist in Understanding