Question

Public reporting on the effectiveness of internal control over financial reporting, as required by the Sarbanes-Oxley Act, includes:

A) a statement that the public accounting firm that audited the financial statements has provided input on the design of internal controls.

B) the auditor provides an opinion on whether the entity maintained, in all material respects, effective ICFR as of the specified date, based on the control criteria.

C) an explicit statement as to whether management agrees with the public accounting firm's assessment of internal controls.

D) a detailed statement describing changes or additions to the internal control environment that occurred in the current year.

Answer 1

Public reporting as per the Sarbanes-Oxley Act involves auditors providing an opinion on the effectiveness of a company's ICFR, aiming to protect investors and restore confidence in financial reporting following historical accounting scandals.

Step-by-step explanation:

Public reporting on the effectiveness of internal control over financial reporting (ICFR), as required by the Sarbanes-Oxley Act, includes the auditor providing an opinion on whether the entity maintained, in all material respects, effective ICFR as of the specified date, based on the control criteria. This requirement came about as a result of several high-profile accounting scandals involving corporations like Enron and WorldCom, which led to a loss of investor confidence in the financial information provided by public corporations. The Sarbanes-Oxley Act aims to protect investors from accounting fraud by strengthening corporate governance and accountability.