Which of the following refers to a deficiency where there is more than a remote possibility that a material misstatement could occur in the financial statements due to a breakdown in the system of internal control?
A)Material weakness
B)Significant deficiency
C)Control deficiency
D)Insignificant deficiency

Question

Quizplus · Accepted Answer

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the company's financial reporting. A control deficiency is a deficiency in internal control that exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. An insignificant deficiency is a deficiency in internal control that is not important enough to merit attention by those responsible for oversight of the company's financial reporting.

Which of the Following Refers to a Deficiency Where There