Question

Management documentation of the ICFR assessment should include all of the following except?

1) documentation regarding every control in a process
2) documentation regarding reasonable support for the basis for management's assessment and conclusion
3) documentation regarding the design of controls management has placed in operation
4) documentation on the controls management concludes are adequate to address the entity's financial reporting risks

Answer 1

Documentation for ICFR does not have to include details on every control within a process, but it should contain reasonable support and documentation on the design and adequacy of controls for financial reporting risks.

Step-by-step explanation:

The question regarding what management documentation of the ICFR (Internal Control over Financial Reporting) assessment should exclude is: Management documentation of the ICFR assessment does not need to include documentation regarding every control in a process.

The understanding of Internal Control over Financial Reporting (ICFR) is critical for ensuring the accuracy and reliability of a company's financial reporting. Legally, management is required to assess the effectiveness of ICFR and maintain documentation that substantiates this assessment. But, not every control needs detailed documentation; rather, an emphasis is placed on those controls that are deemed critical to address the entity's financial reporting risks. Reasonable support for management's assessment and conclusion, including documentation regarding the design of controls and their adequacy, must be provided as part of this process.