The absence of sufficiently documented evidence to support management's assessment of the operating effectiveness of ICFR is a(n):
A) material weakness that would require the auditor to withdraw from the audit engagement.
B) internal control deficiency that could preclude the issuance of an unqualified audit report.
C) matter of concern only to the company's audit committee, predecessor auditors, and internal auditors.
D) example of the effective operation of the company's document retention policy.

Question

Quizplus · Accepted Answer

The absence of sufficiently documented evidence to support management's assessment of the operating effectiveness of ICFR is an internal control deficiency, as it shows a lack of proper documentation and processes to ensure the effectiveness of internal controls. This deficiency could potentially prevent the issuance of an unqualified audit report, as it raises concerns about the reliability of the financial statements.

The Absence of Sufficiently Documented Evidence to Support Management's Assessment