Good use of a narrative method of understanding a client's system of internal control would be when the ________.
A)client is large and complicated
B)is relatively small and not overly complex
C)requests the auditor do so
D)inherent risk is deemed to be high

Question

Quizplus · Accepted Answer

A narrative method of understanding a client's system of internal control is best suited for relatively small and not overly complex clients. For large and complicated clients, a flowchart or other visual aid may be more effective. The auditor should always seek to understand the client's system of internal control, but a narrative method may not be necessary if the inherent risk is low. The client's request alone should not dictate the method used by the auditor.

Good Use of a Narrative Method of Understanding a Client's