Which of the following statements is true regarding the SEC's 2007 interpretive release to management for assessing and reporting on the effectiveness of ICFR?
A) Examples of specific management documentation are provided in the release.
B) If controls appropriately address risks, indicating design effectiveness, management tests the controls to assess operating effectiveness.
C) The overall system of ICFR may be deemed effective if one or only a few material misstatements are identified.
D) Management only needs to test those controls that are ineffective in the prevention of material misstatements in the financial statements.

Question

Quizplus · Accepted Answer

The SEC's 2007 interpretive release states that if controls appropriately address risks, indicating design effectiveness, management tests the controls to assess operating effectiveness. The release does not provide specific examples of management documentation, and management must test all controls, not just those deemed ineffective, to assess the overall effectiveness of ICFR. A few material misstatements cannot justify an overall ineffective system of ICFR.

Which of the Following Statements Is True Regarding the SEC's