What are (a) an internal control deficiency, (b) a significant deficiency, and (c) a material weakness?

Q: 1. Describe in detail the main internal control weakness in this situation. Specify what negative…

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Q: What is the effect of a Significant Deficiency? What is it?

A: Auditing means the inspection of financial accounts of the company to determine if the records are…

Q: Explain how materiality differs for failure to follow GAAP and for lack of independence.

A: Generally Accepted Accounting Principles (GAAP): Generally Accepted Accounting Principles are the…

Q: What is a Material Weakness?

A: Material Weakness: Material weakness is the often the result of deficiencies in one or more of a…

Q: Which of the following would not result in exposure to nonsampling risk?a. Measuring the…

A: Sampling: Sampling allows an individual to obtain information about the population of interest in a…

Q: Which statement is incorrect concerning the constraint on relevant and reliable information? *…

A: Solution: Following statements are correct concerning the constraint on relevant and reliable…

Q: What are the key limitations of an internal control system?

A: Internal Control: A mechanism to maintain the goals of an entity in terms of organizational…

Q: Difference Between Traceability and Controllability?

A: Following is the answer to the given question

Q: What is management fraud?

A: Fraud:   It is an intentional misappropriation of the assets or the financial records of an…

Q: Why is poor-quality systems documentation a prevalent problem?

A: Computer Based Information System: Computer based information system refers to the record of data…

Q: Explain Deficiency Judgment?

A: To borrow funds, borrower might be required to mortgage its property to the lender. In case that…

Q: What must occur if a Significant Deficiency is identified?

A: Definition:   Internal control: Internal control is a process which ensures continuous reliability…

Q: Distinguish between inherent risk and control risk. How do internal controls affect inherent risk…

A: Audit Risk: The risk of issuing an unqualified audit report due to failure in detecting material…

Q: Discuss the differences between a control deficiency, a significant deficiency, a material weakness,…

A: Control deficiency: A control deficiency is a flaw in the functioning or design of a control system…

Q: Which of the following is not one of the components of internal control according to the framework?…

A: Internal control means the way to doing the work and reducing the risk to any loss. Sound internal…

Q: What is the risk of assessing Control Risk too low?

A: Definition:   Tests of controls: Tests of controls form the part of audit procedures to be…

Q: Give an explanation about this statement: Why does control or internal control fails?

A: Internal control refers to the process of implementing and exercising the various mechanisms, rules,…

Q: Which of the following is FALSE regarding advantages and disadvantages of the SML or CAPM?

A: The following statements are true: The model relies on the past to predict the future, which is not…

Q: ) What deficiencies in IRR can be overcome by using MIRR?

A: Introduction : Internal rate of return, commonly referred to as the IRR, can be understood as the…

Q: Should standards be used to identify whom to blame for problems?

A: Standards are set to identify whether the actual activity is performed efficiently. The variances…

Q: What is the risk of Incorrect Acceptance?

A: Risk of incorrect acceptance: The risk that the sample selected by the auditor may show that there…

Q: What is a Control Deficiency?

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Q: “Total input includes abnormal as well as normal spoilage and is, therefore, inappropriate as a…

A: Inventory shrinkage: It represents the loss of inventory. In other words, it refers to the…

Q: What is required if a Material Weakness is identified?

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Q: What are the limitations on Control Activities?

A: Internal control: Internal control is a process which ensures continuous reliability of…

Q: The concept of reasonable assurance recognizes that the cost of internal control should not exceed…

A: Internal control would seem to be a method created by an institution or university's governing…

Q: Should standards be used to identify who to blame for problems?

A: Standards are set to identify whether the actual activity is performed efficiently. The variances…

Q: What are valid weaknesses of NPO?

A: Not for profit organization have certain weaknesses. some for them are- 1. Limited Purposes In order…

Q: What is the Allowable Risk of Over-reliance?

A: Auditor has to test the account balances and classes of transactions and has to do both control…

Q: internal control strength or weakness

A: Weakness defines the control needs to improved in that area to minimise the risk. Strength defines…

Q: efine the term materiality and explain why it may be d

A: Materiality is quite important in preparing the financial statement and it is very important to the…

Q: What does a deficiency judgment mean?

A: Deficiency judgement refers as if borrower takes money from a lender and he is  fails to return back…

Q: What is the condition of security? Has it been reasonably well maintained or does it show the…

A: Security is a financial instrument, either equity or debt, which has some legal values. Securities…

Q: Explain how materiality differs for failure to follow GAAP and for lack of independence.

A: Auditing means the inspection of financial accounts of the company to determine if the records are…

Q: What is underpricing? Why is it used? What evidence do we have to support the belief that…

A: Underpricing is a common term used in Initial public offering of shares of a private company which…

Q: What is the risk of assessing Control Risk too high?

A: Control risk refers to the probability of financial statements that were considered wrongly stated…

Q: Difference Between Traceability and Controllability? Explain briefly in points.

A: Traceability and controllability are two concepts used in cost accounting. These are the forms of…

Q: “Units of abnormal spoilage are inferred rather than identified.”Explain.

A: Spoilage:Spoilage is the defective item at intermediate or final stage. The spoilage goods cannot be…

Q: Which of the following is NOT an example of a significant deficiency in internal control?

A: Statement 2,3 and 4 are examples of significant deficiency in internal control as they are…

Q: What are some limitations of internal controls?

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