Final answer:
The false statement is that the auditor should provide recommendations for improving internal control in the audit report. The Sarbanes-Oxley Act requires auditors to report on the effectiveness of ICFR, but not to include recommendations.
Step-by-step explanation:
The Sarbanes-Oxley Act of 2002 (SOX) was enacted to increase confidence in financial information provided by public corporations and protect investors from accounting fraud, following major scandals involving corporations such as Enron and WorldCom. In regard to the given statements about the requirements of SOX, the auditor's evaluation of internal controls is to ensure that they are effective in accurately and fairly reflecting the firm's transactions. Management is responsible for including a report on the effectiveness of internal control over financial reporting (ICFR) in the entity's annual report and must state its responsibility for establishing and maintaining an adequate internal control system. Moreover, if there are any material weaknesses, management should identify them in its report.
The statement that is false is option D, which suggests that auditors should provide recommendations for improving internal control in the audit report. According to SOX, the auditor's role is to report on the effectiveness of the ICFR, not to provide recommendations in their report.