Choice "B" is correct. The auditor is not required to evaluate operating effectiveness as part of obtaining an understanding of internal control, and therefore need not document the basis for this decision.
Choice "d" is incorrect. The auditor is required to prepare a written audit plan.
Choice "c" is incorrect. Audit documentation should be sufficient to show that the accounting records agree or reconcile with the financial statements.
Choice "a" is incorrect. Establishing an understanding with the client is required by GAAS, and an engagement letter is a presumptively mandatory requirement.
