Which of the following statements regarding audit findings is ?
A) A significant deficiency is a deficiency in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis.
B) A material weakness is a deficiency in internal control important enough to merit attention by those charged with governance.
C) A deficiency exists when the design or operation of a control does not allow management or employees to prevent, or detect and correct misstatements on a timely basis.
D) All of the above are true.

Question

Quizplus · Accepted Answer

A deficiency is indeed when the design or operation of a control does not allow for timely prevention, detection, or correction of misstatements. A significant deficiency is less severe than a material weakness, which is not accurately described in option B.

Which of the Following Statements Regarding Audit Findings Is