Final answer:
The auditor's report on internal control over financial reporting includes the auditor's opinion on the effectiveness of those controls. Various opinions can be issued depending on the presence of material weaknesses or other factors. A material weakness typically prevents an unqualified opinion.
Step-by-step explanation:
The auditor's report on internal control over financial reporting is an integral part of the auditing process, and it's essential to understand what it entails. The correct statement concerning this report is that it contains an opinion on the effectiveness of internal control over financial reporting based on the auditor's independent work. An auditor can issue different types of opinions, including an unqualified opinion (no material weaknesses and the controls are designed and operating effectively), a qualified opinion (if there are exceptions, but they are not pervasive), an adverse opinion (if the controls are not operating effectively and there are material weaknesses), or a disclaimer of opinion (when the auditor cannot express an opinion).
An auditor must state management's assessment of the effectiveness of internal control over financial reporting and indicate whether they agree with this assessment. If a material weakness is identified during the audit, this usually prevents the auditor from issuing an unqualified opinion—thus, statement 4 is incorrect.