Narratives, flowcharts and internal control questionnaires are three common methods of:
A) testing the internal controls.
B) documenting the auditor's understanding of internal controls.
C) designing the audit manual and procedures.
D) documenting the auditor's understanding of the client's organisational structure.

Question

Quizplus · Accepted Answer

Narratives, flowcharts, and internal control questionnaires are all used to document the auditor's understanding of internal controls. These tools help the auditor to identify the key controls in place, the flow of transactions, and potential weaknesses in the control system. This information is then used to design the audit procedures and determine the extent and nature of testing that needs to be performed.

Narratives, Flowcharts and Internal Control Questionnaires Are Three Common Methods