Question

Which section of the unqualified audit report on the effectiveness of ICFR would the following statement belong in: "We have audited the internal control over financial reporting of The Bread Company as of December 31, 2020 based on the criteria established in the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission"?

1) Opinion paragraph
2) Definition and inherent limitations paragraph
3) Scope paragraph
4) Basis for opinion paragraph

Answer 1

The discussed statement is part of the scope paragraph of an unqualified audit report on ICFR, detailing the audit's criteria based on COSO's framework.

Step-by-step explanation:

The statement "We have audited the internal control over financial reporting of The Bread Company as of December 31, 2020 based on the criteria established in the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission" would belong in the scope paragraph of the unqualified audit report on the effectiveness of Internal Control over Financial Reporting (ICFR). The scope paragraph describes the nature of the audit, the timeframe covered by the audit, and the criteria or framework upon which the audit was based, which in this case is the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).