Micah and Sally are two audit staff associates working on the audit of Summertime Enterprises, a publicly-traded firm and provider of beach goods on the eastern coast of the United States. Micah mentions to Sally that he remembers hearing about an integrated audit back in college during an accounting class, but doesn't recall exactly what this is. How should Sally best respond to this?
a. It's actually fairly easy to understand. When we think of an integrated audit, we basically combine the audit of the financial statements with the audit of internal control, and do them both at the same time with the same tests.
b. The term 'integrated audit' is used because, for publicly-traded firms, we are required to audit both the client's system of internal control as well as the financial statements.
c. We use the term 'integrated audit' to refer to how we integrate the testing of populations and samples. Some larger accounts are only sampled, whereas with smaller accounts we can audit populations.
d. None of these answers are correct.