Which of the following is the correct definition of "control deficiency"?
A) A control deficiency exists if the design or operation of controls does not permit company personnel to prevent or detect misstatements on a timely basis.
B) A control deficiency exists if one or more deficiencies exist that adversely affect a company's ability to prepare external financial statements reliably.
C) A control deficiency exists if the design or operation of controls results in a more than remote likelihood that controls will not prevent or detect misstatements.
D) A control deficiency exists if the design or operation of controls results in a more than probable likelihood that controls will prevent or detect misstatements.

Question

Quizplus · Accepted Answer

A control deficiency is defined as a situation where the design or operation of controls does not allow company personnel to prevent or detect misstatements in a timely manner. This encompasses both the failure in the design of the control (it is not adequate to catch errors or fraud) and the failure in operation (the control might be well designed but is not being applied effectively).

Which of the Following Is the Correct Definition of "Control