A deficiency that implies that there is a reasonable possibility of misstatement in the financial statements that is significant but not material is
A) A material weakness.
B) A significant deficiency.
C) An insignificant deficiency.
D) A probable deficiency.

Question

Quizplus · Accepted Answer

A significant deficiency is a deficiency in internal control over financial reporting that is less severe than a material weakness but significant enough to merit attention from those responsible for oversight of the company's financial reporting. It implies that there is a reasonable possibility of misstatement in the financial statements that is significant but not material.

A Deficiency That Implies That There Is a Reasonable Possibility