Question

As a matter of policy, all correspondence to or from regulatory auditors received by the management of the Barclay Corporation is provided to the Barclay Corporation audit committee and the corporation's full board as needed. In assessing entity wide controls, management might conclude:

A. The Board of Directors understand and exercises oversight responsibility related to financial reporting and related internal control
B. Management's philosophy and operating style support achieving effective internal control over financial reporting
C. The company organization structure supports effective internal control over financial reporting
D. Management and employees are assigned appropriate levels of authority and responsibility to facilitate effective internal control over financial reporting

Answer 1

Management might conclude that the Board of Directors understand and exercise oversight responsibility, management's philosophy and operating style support effective control, the company organization structure supports control, and management assigns appropriate authority and responsibility.

Step-by-step explanation:

In assessing entity-wide controls, management might conclude that:

1. The Board of Directors understand and exercises oversight responsibility related to financial reporting and related internal control. The board of directors, elected by the shareholders, is responsible for governance and oversight of the company, including financial reporting and internal control.
2. Management's philosophy and operating style support achieving effective internal control over financial reporting. The approach and mindset of management towards internal control contribute to the effectiveness of financial reporting.
3. The company organization structure supports effective internal control over financial reporting. The organizational structure should be designed to facilitate the implementation and maintenance of internal control over financial reporting.
4. Management and employees are assigned appropriate levels of authority and responsibility to facilitate effective internal control over financial reporting.