The Report on the Effectiveness of Internal Control Over Financial

question 3

Multiple Choice

The report on the effectiveness of internal control over financial reporting for companies filing reports with the SEC in the U.S.must include which of the following elements?

• A)a statement that management is responsible for maintaining effective internal control over financial reporting and for assessing the effectiveness of the internal control
• B)a statement that the auditor is responsible for expressing an opinion on the effectiveness of internal control over financial reporting based on management's representations
• C)a statement that the audit was conducted in accordance with the standards of the Public Companies Accounting Oversight Board (United States)
• D)a statement that the standards of the AICPA require that the auditor plan and perform the audit to obtain reasonable assurance about the effectiveness of internal controls over the financial reporting process
• E)a statement that the auditor certifies the audit provides a reasonable basis for his opinion
• F)both A and B
• G)both A and C
• H)both D and E

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Definitions:

First-order

Generally pertains to the most basic or primary level of something, often used in mathematical and logical expressions indicating the initial or simplest case.

Least Squares Method

The least squares method is a statistical technique used to determine the best-fit line for a set of data, by minimizing the sum of the squares of the differences between observed and estimated values.

Best Fit

A method or line that best approximates the relationship between variables in a set of data.

Minimizes

The process of finding the lowest value of a function, often relevant in optimization problems.