Question

Identify the correct statement regarding integrated audits.




Multiple Choice



A. The AICPA began requiring integrated audits in response to accounting scandals such as Enron.



B. An integrated audit involves providing an opinion on the financial statements and the internal control effectiveness of a company.



C. Evaluating internal controls is often a vital part of an integrated audit.



D. The term ‘integrated audit’ refers to the cooperation between internal and external auditors in preparing audited financial statements.

Answer 1

Answer:

The correct answer is letter "B": An integrated audit involves providing an opinion on the financial statements and the internal control effectiveness of a company.

Explanation:

An integrated audit implies an audit carried out by an external professional over the financial statements of a firm and its financial reporting system. Besides, the external auditor must give a point of view on the company's effectiveness on internal control related to the financial reporting system.