A deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness is referred to as a significant deficiency.

Question

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This statement is correct. A significant deficiency is a deficiency or a combination of deficiencies in internal control that is less severe than a material weakness but is still important enough to merit attention by those responsible for oversight of the company's financial reporting.

A Deficiency, or a Combination of Deficiencies, in Internal Control