Which One of the Following Statements Regarding Auditor Documentation of the Client's

question 105

Multiple Choice

Which one of the following statements regarding auditor documentation of the client's internal controls is correct?

• A) No one particular form of documentation is necessary, and the extent of documentation may vary.
• B) No documentation is necessary, although it is desirable.
• C) Documentation must include procedural write-ups.
• D) Documentation must include flowcharts.

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Definitions:

Revenues

The total amount of money received by a company for goods sold or services provided during a specific period.

Expenses

Economic costs that a business incurs through its operations to earn revenue.

Trial Balance

A bookkeeping report that lists the balances in each general ledger account at a specific point in time, used to check the accuracy of bookkeeping entries.

Debit Column

The side of an accounting ledger where increases in assets, expenses, and withdrawals are recorded.