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Does the audit team test the efficiency of the internal control framework?

No, the audit team is not concerned with the “efficiency” of the internal control framework. Efficiency could relate to how streamlined a company’s internal control framework is, but that the audit team would be more concerned with the “effectiveness” of the company’s internal controls.

So remember, when it comes to the two “E”s, the audit team will be testing the operating “effectiveness” of internal controls. This is one of the requirements under Section 404 of the Sarbanes Oxley Act, which is applicable to public companies (issuers).

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