The separate report on internal control over financial reporting
A) cannot contain a cross-reference to the auditor's report on the financial statements.
B) includes a paragraph that addresses the inherent limitations of internal controls.
C) is addressed to the PCAOB.
D) includes a scope paragraph which refers to the framework used to evaluate internal controls.

Question

Quizplus · Accepted Answer

The separate report on internal control over financial reporting includes a paragraph that addresses the inherent limitations of internal controls. This is required by the PCAOB auditing standards. Answer A is incorrect because the report can contain a cross-reference to the auditor's report on the financial statements. Answer C is incorrect because the report is addressed to management and the audit committee of the company, not the PCAOB. Answer D is incorrect because the scope paragraph in the report refers to the procedures and methods used to evaluate internal controls, not the framework.

The Separate Report on Internal Control Over Financial Reporting