When auditing financial statements of a private company, the minimum work an auditor must perform in connection with a company's internal control is best described by which of the following statements?
A)Perform exhaustive tests of accounting controls and evaluate the company's control system effectiveness.
B)Determine whether the company's control policies are designed well enough to prevent material misstatements.
C)Prepare auditing working papers that document the auditor's understanding of the company's internal control.
D)Design procedures to search for significant deficiencies in the actual operation of the company's internal control.

Question

Quizplus · Accepted Answer

When auditing financial statements of a private company, the minimum work an auditor must perform in connection with a company's internal control is to prepare auditing working papers that document the auditor's understanding of the company's internal control. This is known as documenting the understanding of internal controls and is a required step in every audit. While the other options (A, B, and D) are important components of an internal control audit, they are not the minimum requirements for a private company audit.

When Auditing Financial Statements of a Private Company, the Minimum