When obtaining an understanding of an entity's internal control in a financial statement audit at a non-public company, an auditor is not obligated to:
A)determine whether the 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 the auditor should perform procedures to obtain an understanding of the design of the internal control system and document their understanding, they are not required to search for significant deficiencies in the operation of the internal control system. However, if the auditor becomes aware of a significant deficiency during their audit, they are required to report it to management and/or those charged with governance.

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