An "integrated audit" as stated in Section 404 of the Sarbanes-Oxley Act means:
A)the auditor must consider the integrated thoughts and ideas of everyone on the audit staff.
B)the auditor must conduct two audits, one on the effectiveness of internal control and one on the financial statements, in an integrated way.
C)the auditor must integrate the same objectives whether auditing internal control or auditing the financial statements.
D)two independent CPA firms must work together on the audit.

Question

Quizplus · Accepted Answer

An integrated audit, as defined in Section 404 of the Sarbanes-Oxley Act, requires the auditor to conduct two audits, one on the effectiveness of internal control and the other on the financial statements, in an integrated way. This means that the auditor must consider the relationship between internal control and financial reporting, so that the auditor can obtain sufficient and appropriate evidence to form an opinion on the financial statements as a whole. Therefore, choice (B) is the correct answer. Choice (A) is incorrect because the integrated audit does not require the auditor to consider the integrated thoughts and ideas of everyone on the audit staff. Choice (C) is incorrect because the integrated audit may have different objectives for auditing internal control and auditing the financial statements, but these objectives need to be integrated to obtain an overall opinion on the financial statements as a whole. Choice (D) is incorrect because the Sarbanes-Oxley Act does not require two independent CPA firms to work together on the audit.

An "Integrated Audit" as Stated in Section 404 of the Sarbanes-Oxley