2, An Audit of Internal Control over Financial Reporting Performed in Conjunction with an Audit of Financial Statements.1 The new standard highlights the benefits of strong internal controls over financial reporting and furthers the objectives of the Sarbanes-Oxley Act. The standard requires external auditors of public companies to evaluate the process that management uses to prepare the company’s financial statements.
External auditors must gather evidence regarding the design and operational effectiveness of the company’s internal controls and determine whether evidence supports management’s assessment of the effectiveness of the company’s internal controls.