Significant deficiencies are matters that come to an auditor's attention that should be communicated to an entity's audit committee because they represent:
A)disclosures of information that significantly contradict the auditor's going concern assumption.
B)material fraud or illegal acts perpetrated by high-level management.
C)deficiencies in the design of controls or failures in the operation of internal controls.
D)manipulation or falsification of accounting records or documents from which financial statements are prepared.

Question

Quizplus · Accepted Answer

Significant deficiencies relate to deficiencies in the design or operation of an entity's internal controls over financial reporting that are deemed material and represent a risk that financial statements may contain misstatements. Such deficiencies should be communicated to the entity's audit committee to enable them to take corrective action. While A, B, and D are all significant issues, they do not necessarily fall under the definition of significant deficiencies as defined by the auditing standards.

Significant Deficiencies Are Matters That Come to an Auditor's Attention