The auditor's understanding of the client's system of internal control should be ________.
A)discussed among audit team members only
B)submitted to the client's internal audit function for agreement/approval
C)well documented so it can be referred back to at any time
D)in documentary form only and submitted to the client's attorneys for risk assessment

Question

Quizplus · Accepted Answer

The auditor's understanding of the client's system of internal control should be well documented so it can be referred back to at any time. This is necessary for efficient planning and execution of the audit, and also serves as a reference point for future audits. The understanding should be communicated to relevant members of the audit team and discussed among them, but there is no requirement to submit it to the client's internal audit function or attorneys.

The Auditor's Understanding of the Client's System of Internal Control