A control deficiency that is less severe than a material weakness,but important enough to merit attention by those responsible for oversight of the company's financial reporting is referred to as a(n):
A)Control deficiency.
B)Inherent limitation.
C)Reportable deficiency.
D)Significant deficiency.

Question

Quizplus · Accepted Answer

A significant deficiency is a control deficiency that is less severe than a material weakness, but important enough to merit attention by those responsible for oversight of the company's financial reporting. A reportable deficiency is a deficiency in internal control over financial reporting that is considered to be of material importance to the preparation of a company's financial statements. An inherent limitation refers to the fact that no system of internal control can provide absolute assurance that all transactions are recorded accurately and completely. A control deficiency is a condition 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.

A Control Deficiency That Is Less Severe Than a Material