ACCY 360 FINAL EXAM PAPER 2026
COMPLETE QUESTIONS AND VERIFIED
SOLUTIONS
◉ SOX Section 404
Answer: Requires management of public companies to report on
responsibility for adequate ICFR and assess whether ICFR is
effective at year-end.
◉ Dodd-Frank Act of 2010
Answer: Exempts non-accelerated filers from the external audit
requirement for ICFR, though management still assesses ICFR
annually.
◉ Auditor responsibility under Section 404
Answer: Audit and report on the effectiveness of ICFR as part of an
integrated audit.
◉ ICFR
Answer: A process designed to provide reasonable assurance
regarding reliable financial reporting and preparation of GAAP
financial statements.
, ◉ ICFR purpose: records
Answer: Maintain records that accurately and fairly reflect
transactions and asset dispositions.
◉ ICFR purpose: authorization and recording
Answer: Provide assurance transactions are properly authorized and
recorded under GAAP.
◉ ICFR purpose: safeguarding assets
Answer: Provide assurance of prevention or timely detection of
unauthorized use or disposition of assets.
◉ Two dimensions of a control deficiency
Answer: Likelihood and magnitude.
◉ Likelihood
Answer: Whether misstatement is reasonably possible or probable.
◉ Magnitude
Answer: Whether the possible misstatement is material, significant,
or insignificant.
◉ Integrated audit
COMPLETE QUESTIONS AND VERIFIED
SOLUTIONS
◉ SOX Section 404
Answer: Requires management of public companies to report on
responsibility for adequate ICFR and assess whether ICFR is
effective at year-end.
◉ Dodd-Frank Act of 2010
Answer: Exempts non-accelerated filers from the external audit
requirement for ICFR, though management still assesses ICFR
annually.
◉ Auditor responsibility under Section 404
Answer: Audit and report on the effectiveness of ICFR as part of an
integrated audit.
◉ ICFR
Answer: A process designed to provide reasonable assurance
regarding reliable financial reporting and preparation of GAAP
financial statements.
, ◉ ICFR purpose: records
Answer: Maintain records that accurately and fairly reflect
transactions and asset dispositions.
◉ ICFR purpose: authorization and recording
Answer: Provide assurance transactions are properly authorized and
recorded under GAAP.
◉ ICFR purpose: safeguarding assets
Answer: Provide assurance of prevention or timely detection of
unauthorized use or disposition of assets.
◉ Two dimensions of a control deficiency
Answer: Likelihood and magnitude.
◉ Likelihood
Answer: Whether misstatement is reasonably possible or probable.
◉ Magnitude
Answer: Whether the possible misstatement is material, significant,
or insignificant.
◉ Integrated audit
