Bright was assigned as the auditor of Elendil Company, a public company engaged in the production of environment$-$friendly cars made out of wooden materials and is considered as an Accelerated Filer as per SEC. Bright explained to the client's representatives that aside from the financial statement audit, the audit team is also required to produce an audit report on the internal controls over financial reporting of Elendil. However, this was questioned by Elendil's representative as they do not understand the reason behind. Which of the following statements provide the reason why audit of ICFR is necessary?

The audit team needs to conduct the audit of ICFR as an effective ICFR will mean that they need not conduct a financial statement audit for efficiency purposes.

The audit team needs to conduct an audit of ICFR so they can provide Elendil with suggestions on how they can improve their internal controls over financial reporting.

Conducting an audit of ICFR is required because every public company is prone to have poor internal controls in detecting fraud.

Audit of ICFR is required because an effective ICFR provides reasonable assurance on the reliability of financial reporting for external purposes.