A material weakness is a situation in which
A) It is probable that an immaterial financial statement misstatement would not be detected on a timely basis.
B) There is a remote likelihood that a material misstatement would be detected on a timely basis.
C) It is reasonably possible that a material misstatement would not be detected on a timely basis.
D) It is reasonably possible that an immaterial misstatement would not be detected on a timely basis.

Question

Quizplus · Accepted Answer

A material weakness is when there is a reasonable possibility that a material misstatement would not be detected on a timely basis. Option A talks about an immaterial misstatement which is not relevant here. Option B talks about a remote likelihood which does not fit the definition of a material weakness. Option D talks about an immaterial misstatement again.

A Material Weakness Is a Situation in Which