In some cases, management can correct deficiencies and material weaknesses before the auditor does significant testing, which may permit a reduction in control risk.

Question

Quizplus · Accepted Answer

If management takes corrective measures to address deficiencies and material weaknesses, it can improve the effectiveness of internal controls and reduce the risk of misstatements in the financial statements. This can enable the auditor to reduce control risk and perform less extensive testing. However, the auditor must still obtain sufficient audit evidence to support their opinion on the financial statements.

In Some Cases, Management Can Correct Deficiencies and Material Weaknesses