An "integrated audit" as stated in Section 404 of the Sarbanes-Oxley Act means
A) The auditor must consider the integrated thoughts and ideas of everyone on the audit staff.
B) The auditor must conduct two audits, one on the effectiveness of internal control and one on the financial statements, in an integrated way.
C) The auditor must integrate the same objectives whether auditing internal control or auditing the financial statements.
D) Two independent CPA firms must work together on the audit.

Question

Quizplus · Accepted Answer

An integrated audit under Section 404 of the Sarbanes-Oxley Act requires the auditor to conduct two audits - one on the effectiveness of internal control and one on the financial statements - in an integrated way. The purpose of this approach is to ensure that the auditor considers the relationship between internal control and financial reporting objectives, and identifies any deficiencies that might impact the reliability of financial statements. Option A is incorrect because the focus of an integrated audit is not on integrating the thoughts and ideas of the audit staff but on integrating the audit objectives themselves. Option C is also incorrect because it confuses the concept of integrated auditing with the concept of designing integrated audit objectives. Option D is incorrect because the requirement is for the auditor to conduct an integrated audit, not for two firms to work together on the audit.

An "Integrated Audit" as Stated in Section 404 of the Sarbanes-Oxley