For public companies in the U.S. ,which statement is correct?
A)Auditors and management are involved in testing of internal controls over financial reporting.
B)Management hires the auditor to design internal controls related to the financial reporting process.
C)The audit opinion on the financial statements must be the same as the audit opinion on the financial reporting process.
D)The accounting firm performing the financial statement audit does not perform the audit of internal controls over financial reporting.

Question

Quizplus · Accepted Answer

Auditors and management are both responsible for testing the effectiveness of internal controls over financial reporting in order to ensure the accuracy and reliability of the financial statements. This is required by the Sarbanes-Oxley Act of 2002. Therefore, options B, C, and D are incorrect as they do not align with this requirement. Management is responsible for designing and implementing effective internal controls and the audit opinion on the financial statements can differ from the audit opinion on the effectiveness of internal controls over financial reporting. However, auditors are still required to test and evaluate these controls.

For Public Companies in the U