A material weakness in the design of the operation of controls discovered in an audit of internal controls results in:
A)A qualified management letter.
B)An adverse report on internal controls.
C)The firing of the auditors.
D)Adjusting audit journal entries.

Question

Quizplus · Accepted Answer

A material weakness is a deficiency discovered through an audit that is serious enough to impact the accuracy of financial reporting. As a result, the auditor would issue an adverse report on internal controls, indicating that the company's internal controls are not effective in ensuring the accuracy of the financial statements. A qualified management letter may be issued for less serious deficiencies. Firing auditors or adjusting audit journal entries would not be appropriate responses to the discovery of a material weakness in internal controls.

A Material Weakness in the Design of the Operation of Controls