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Which of the following statements is true? A. Results of procedures performed in the financial statement...

Which of the following statements is true?

A. Results of procedures performed in the financial statement audit should not be used when planning or performing the audit of Internal Controls over Financial Reporting (ICFR) required by SOX Section 404 and PCAOB #5.

B. The same engagement team is required to perform both the audit of ICFR and the financial statement audit.

C. The audit of ICFR involves more extensive tests of ICFR than those required to be performed in a financial statement audit.

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Answer #1

Answer: Option "B" is correct.

The same engagement team is required to perform both the audit of ICFR and the financial statement audit. This is true.

Audit of internal control over financial reporting and the financial statements can be done simultaneously. When performing these audits, engagement team can be same. The auditors who are performing ICFR audit can also perform financial statements audit so as to make the results more accurate fair and uniform.

The engagement team should design his/her testing of control to accomplish the objectives of both the audits simulatenously-

Objectives are:

  1. To obtain enough evidence to support the auditor's opinion on internal control over financial reporting.
  2. To obtain enough evidence to support the auditor's control risk assessments for the audit of financial statement.
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