Choice "C" is correct. Reviewing an internal control questionnaire provides information about control policies and procedures, but does not provide information about actual transactions or events that have occurred. Therefore, it is not likely to uncover any acts of noncompliance with laws and regulations.
Choices "b" and "d" are incorrect. During the planning stage of the audit, the auditor is required to gain an understanding of the client's business. Such planning activities may include reading the board minutes or making inquiries of management or of legal counsel. In the absence of identified or suspected noncompliance, these planning procedures, along with requesting management's written representations concerning the entity's compliance with laws and regulations, comprise the required procedures related to noncompliance.
Choice "a" is incorrect. Performing tests of details of transactions may provide information indicative of acts of noncompliance, such as information regarding unauthorized or improperly recorded transactions; payments of unusual fines or penalties; payments that are unusually large or excessive, especially those made in cash; unexplained payments; or payments for unspecified services.