Which Statement About Internal Controls Is FALSE

question 51

Multiple Choice

Which statement about internal controls is FALSE?

• A)Public companies must issue a report on internal control with their financial statements.
• B)Outside auditors much evaluate and report on the soundness of a company's internal controls.
• C)The Sarbanes-Oxley Act requires public companies to issue a report on internal control.
• D)Public companies do not have to evaluate the effectiveness of internal controls.

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Definitions:

Informal Structures

The network of personal and social relationships that naturally forms within an organization, influencing behavior and decision-making outside of formal mechanisms.

Organization Structure

A system of tasks, reporting relationships, and communication linkages.

Daily Work Tasks

Routine activities or assignments that an individual performs as part of their job on a day-to-day basis.

Formal Structures

The official, documented organization of roles, responsibilities, and relationships within an organization designed to coordinate and direct activities.