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:

Attribution Theory

A psychological theory that examines how individuals infer the causes of their own and others' behaviors and events.

Decision Making Theory

A theory that explores how individuals make choices, considering both rational and psychological factors.

Attribution Style Hypothesis

The theory suggesting that individuals have consistent ways of explaining events in their lives, which can impact emotions, motivation, and behaviors.

Dispositional Attributions

Explanations of individual behavior as a result of internal characteristics, such as traits, beliefs, or abilities, rather than external circumstances.