Final answer:
The auditor's report on the effectiveness of internal control must provide an opinion on the maintenance of effective ICFR, include the basis for this opinion, and is typically addressed to shareholders and the board of directors.
Step-by-step explanation:
The auditor's report on the effectiveness of internal control must provide an opinion on whether the entity maintained effective Internal Control over Financial Reporting (ICFR) throughout the financial statement audit period. It is fundamental for this report to contain the basis of the auditor's opinion, demonstrating the auditing firm's reasoning for their conclusion about the effectiveness of the entity's internal controls.
Besides, this report is typically addressed to the shareholders and board of directors, aligning with both groups' roles in corporate governance. As shareholders elect the board to oversee top executives, and the board coordinates with auditors to ensure financial accuracy and transparency, the auditor's report becomes a critical communication to these stakeholders.
This component of corporate governance plays an important role in maintaining trust between the company and its investors, as displayed by the breakdown in governance in the case of Lehman Brothers, where such trust was compromised.
Therefore answer is d. be addressed to the shareholders and board of directors.