When 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 control activities have been placed in operation.
B) Perform procedures to understand the design of the internal control system.
C) Document the understanding of the company's internal control system.
D) Search for significant deficiencies in the operation of the internal control system.

Question

Quizplus · Accepted Answer

While an auditor is required to obtain an understanding of a nonpublic company's internal control system, they are not required to search for significant deficiencies in the operation of the system. However, if they do become aware of any significant deficiencies, they are required to communicate them to management.

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