If auditors conclude the company did not maintain effective ICFR over the period under audit, it would mean the auditors discovered a/an _______ in the client's ICFR.
A)material weakness
B)audit risk
C)reasonable assurance
D)professional skepticism

Question

Quizplus · Accepted Answer

A material weakness is defined by the Securities and Exchange Commission as "a deficiency, or a combination of deficiencies, in ICFR, 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." Therefore, if auditors conclude that the company did not maintain effective ICFR, it would mean they found a material weakness.

If Auditors Conclude the Company Did Not Maintain Effective ICFR