With the issuance of the SEC Interpretative Guidance and the implementation of AS5:
A) Auditors no longer opine on the effectiveness of management's internal control reporting process.
B) The number of controls that need to be documented, evaluated, and tested is reduced.
C) Both a. and b.
D) Neither a. nor b.

Question

Quizplus · Accepted Answer

The SEC Interpretative Guidance and the implementation of AS5 were designed to streamline the process of evaluating internal controls over financial reporting, thereby reducing the burden on companies without compromising the effectiveness of audits. This includes reducing the number of controls that need to be documented, evaluated, and tested. However, auditors are still required to opine on the effectiveness of management's internal control over financial reporting, so option A is not correct by itself but is part of the broader context of changes aimed at making the process more efficient.

With the Issuance of the SEC Interpretative Guidance and the Implementation