Section 404 of the Sarbanes–Oxley Act requires auditors of a public company to analyze and report on the effectiveness of the client’s internal controls over financial reporting. Describe the responsibilities that auditors of public companies have to discover and report (a) significant deficiencies in internal controls and (b) material weaknesses in internal controls. Include a definition of each item in your answer. Under what condition or conditions can auditors issue an unqualified or clean opinion on the effectiveness of a client’s internal controls over financial reporting?
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