Which of the following statements is not true about continuous audit?
Correct answer: C. It is needed when the organization has a good internal control system
- A. It is conducted at regular interval
- B. It may be carried out on daily basis
- C. It is needed when the organization has a good internal control system
- D. It is expensive
Explanation
Continuous audit is generally used where frequent checking is needed, often because internal controls are weak or transactions are numerous. A good internal-control system usually reduces the need for continuous audit, making option c the false statement.
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About Auditing
Auditing examines accounting records and financial statements to determine whether they present a reliable and fairly stated position. The subject covers audit objectives, internal controls, audit evidence, materiality, vouching, verification, working papers, auditor independence, audit reports, and the distinction between an audit and accounting or investigation.
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