Which of the Following Statements Is True Regarding the SEC's

question 58

Multiple Choice

Which of the following statements is true regarding the SEC's 2007 interpretive release to management for assessing and reporting on the effectiveness of ICFR?

• A) Examples of specific management documentation are provided in the release.
• B) If controls appropriately address risks, indicating design effectiveness, management tests the controls to assess operating effectiveness.
• C) The overall system of ICFR may be deemed effective if one or only a few material misstatements are identified.
• D) Management only needs to test those controls that are ineffective in the prevention of material misstatements in the financial statements.

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Definitions:

Matrix Structure

An organizational design that combines two or more types of structures, typically functional and product-based, to leverage the advantages of both.

Functional Manager

is a manager who has authority over a specific department or unit within an organization, specializing in a particular function such as marketing or finance.

Product Manager

A role responsible for the strategy, roadmap, and feature definition for a product or product line, often acting as a liaison between various teams.

Coordination

The management of interdependencies between activities, tasks, and functions to achieve a harmonious operation and aligned efforts towards common goals.