Section 404 of the Sarbanes-Oxley Act, Management Assessment of Internal

question 5

Multiple Choice

Section 404 of the Sarbanes-Oxley Act, Management Assessment of Internal Controls, includes all of the following except:

• A) A statement of management's responsibility for establishing the internal control structure.
• B) A waiver of auditor responsibility for assessing management's report on internal controls.
• C) An assessment of the effectiveness of internal controls by management.
• D) An assessment of the effectiveness of procedures for financial reporting by management.
• E) A requirement that management include in its annual report an internal control report.

---

Definitions:

Materials Cost

The total expense incurred for materials that are used in the production of goods or in the provision of services.

Weighted Average Method

An inventory costing method that assigns an average cost to each item based on the total cost of goods available for sale and the total quantity available.

Applied Factory Overhead

Indirect costs related to manufacturing, allocated to goods based on a predetermined rate.

Direct Labor

The wages or expenses directly associated with the manufacturing of products or delivery of services.