Which of the following is true regarding significant deficiencies and material weaknesses in control for a Nonissuer?
Which of the following is true regarding significant deficiencies and material weaknesses in control for a Nonissuer?
Which of the following is true regarding significant deficiencies and material weaknesses in control for a nonissuer? Auditors should communicate them to management and those charged with governance.
What are significant deficiencies?
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the company’s financial reporting.
When should the auditor make the written communication of significant deficiencies and material weaknesses to management and those charged with governance?
The written communication should be made prior to the issuance of the auditor’s report on the financial statements. The auditor’s communication should distinguish clearly between those matters considered significant deficiencies and those considered material weaknesses, as defined in paragraphs .
Is it possible that the auditor could have identified other types of internal control deficiencies that were not included in the report?
the auditor’s consideration of internal control was not de- signed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies, and therefore, material weaknesses or significant deficien- cies may exist that were not identified.
Which one of the following is most likely to be considered a significant deficiency in internal control?
Which of the following is most likely to be considered a material weakness in internal control? Ineffective oversight of financial reporting by the audit committee.
Which of the following circumstances would be inappropriate for the auditor to communicate to those charged with governance?
Which of the following circumstances would be inappropriate for the auditor to communicate to those charged with governance? The maximum dollar amount of misstatements that could exist without causing the financial statements to be materially misstated.
How bad is a material weakness?
A “material weakness” — considered more severe than a “control deficiency” or a “significant deficiency” by the Public Company Accounting Oversight Board — creates “a more than remote” chance that “a material misstatement will not be prevented or detected” in a company’s financial statements.
Which is worse significant deficiency or material weakness?
A significant deficiency is less severe than a material weakness in that it is unlikely to have a material impact on financial statements, but it is, “important enough to merit attention by those responsible for oversight of the company’s financial reporting,” according to the PCAOB.
Are all material weakness significant deficiencies?
When a material weakness is identified the auditor should?
4. The auditor must communicate in writing to management and the audit committee all significant deficiencies and material weaknesses identified during the audit. The written communication should be made prior to the issuance of the auditor’s report on the financial statements.
Do you need to disclose significant deficiencies?
A: A registrant is obligated to identify and publicly disclose all material weaknesses. If management identifies a significant deficiency it is not obligated by virtue of that fact to publicly disclose the existence or nature of the significant deficiency.
What is a significant control deficiency?
A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the company’s ability to initiate, authorize, record, process, or report external financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote …