Question

Under Section 404 of the Sarbanes-Oxley Act of 2002, what is the independent auditor's responsibility?

		The independent auditor is required to report on and attest to management's assessment of the effectiveness of the internal controls.
		The independent auditor is required to establish and maintain an adequate internal control structure and procedures for financial reporting.
		The independent auditor is required to disclose which member of the audit committee is a financial expert.
		The independent auditor is required to provide certifications with each annual and quarterly report filed with the SEC.

Answer 1

The option "The independent auditor is required to report on and attest to management's assessment of the effectiveness of the internal controls" is correct .

Explanation: The responsibility to  maintain a sound internal control structure lies on the management of the company . The management should properly assess the ongoing effectiveness of the internal controls, the management should ensure that the internal controls of all the publicly traded companies following the procedures. So,for the betterment of it's control section 404 of the Sarbanes-Oxley Act 2002 imposed that the auditor of the company should attest to management's assessment and in case report on the issues.

Option B)Incorrect, The auditor is not required to establish and maintain an adequate internal control structure ,management is responsible for that.

Option C) Incorrect, The duty to disclose the member of audit committee ,who will be financial expert lies with the board.

Option D) Incorrect, The CEO and CFO are required to provide certifications with each annual and quarterly report filled with the SEC.