The auditors should communicate any material concerns regarding internal control:
A) to the audit committee.
B) to the shareholders via the audit report of the ICFR.
C) to the SEC directly.
D) Both "a" and "b".

Question

Quizplus · Accepted Answer

The auditors should communicate any material concerns regarding internal control to the audit committee, which is responsible for overseeing the financial reporting process, and also include them in the audit report of the ICFR (Internal Control over Financial Reporting). This report is included as part of the annual 10-K and is made available to shareholders. Therefore, both choices A and B are correct. There is no need to communicate concerns directly to the SEC unless it is a serious issue that requires immediate attention.

The Auditors Should Communicate Any Material Concerns Regarding Internal Control