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:

Securities Exchange Act

A U.S. law enacted in 1934 that governs the trading of securities, such as stocks and bonds, to protect investors and maintain fair and orderly markets.

Williams Act

A federal law in the United States that governs the disclosure requirements for tender offers in corporate takeovers.

Tender Offer

A public proposal to buy a substantial number of shares from a company's shareholders, typically at a premium to the market price.

Solicitation

The act of requesting or trying to obtain something, often used in legal contexts to refer to efforts to procure goods, services, or funds.