If an auditors preliminary evaluation of internal controls results in an observation that controls may be inadequate,
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If an auditor’s preliminary evaluation of internal controls results in an observation that controls may be inadequate, the next step would be to:
(a) Expand audit work prior to the preparation of an engagement final communication.
(b) Prepare a flowchart depicting the internal control system.
(c) Note an exception in the engagement final communication if losses have occurred.
(d) Implement the desired controls.
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