GAGAS requires auditors to report deficiencies in internal control that they consider to be reportable conditions. Examples of such reportable conditions include all of the following except: A) absence of appropriate segregation of duties consistent with appropriate control objectives. B) evidence of failure to safeguard assets from loss, damage, or misappropriation. C) absence of a sufficient level of control consciousness within the organization. D) failure to follow-up and correct previously identified deficiencies in internal control. E) absence of an efficient use of audit resources.

Question

Quizplus · Accepted Answer

Reportable conditions under GAGAS (Generally Accepted Government Auditing Standards) typically relate to significant deficiencies in the design or operation of internal control that could adversely affect an entity's ability to record, process, summarize, and report financial data. Choices A, B, C, and D all describe scenarios that could undermine the effectiveness of an organization's internal control system. However, choice E, the absence of an efficient use of audit resources, does not directly relate to the internal control over financial reporting but rather to the efficiency and effectiveness of the audit process itself.

GAGAS Requires Auditors to Report Deficiencies in Internal Control That