Final answer:
An integrated audit includes reviews of both the financial statements and internal control over financial reporting. It is vital for corporate governance, as demonstrated by its absence in the Lehman Brothers scandal. Contrary to one of the statements, an integrated audit requires access to the entity's internal controls.
Step-by-step explanation:
An integrated audit is an audit that is comprised of both the audit of internal control over financial reporting and the audit of financial statements. Its purpose is to provide assurance not just on the financial statements but also on the effectiveness of the company's internal controls. When performing an integrated audit, an auditor will consider the company's control environment, which is critical for informing the auditor's risk assessment and determining the nature, timing, and extent of audit procedures.
The board of directors, as the first line of defense in corporate governance, is charged with oversight of top management and ensuring that the company's operations are appropriately managed. Auditing firms, which are a crucial part of the corporate governance process, review the company's financial records to verify their accuracy and reasonableness. In the case of Lehman Brothers, there was a failure in corporate governance leading to investors getting misleading financial information about the company's operations, which is exactly the kind of situation that integrated audits aim to prevent.
While an integrated audit can be performed by two separate audit firms, it typically results in a unified report on both the effectiveness of internal controls and the financial statements. Access to information about the entity's controls is critical for the auditor to carry out an integrated audit, directly contradicting the second statement which suggests that an integrated audit denies the auditor such access.