When completing the audit of internal controls for an issuer, the severity of an internal control deficiency depends ona. Whether there is a reasonable possibility that the company’s controls will fail to preventor detect a misstatement of an account balance or disclosure.b. Whether a misstatement has actually occurred as a result of the deficiency.c. The magnitude of the potential misstatement resulting from the deficiency or thedeficiencies.d. Both a and c are correct.e. All of the above are correct.

Question

When completing the audit of internal controls for an issuer, the severity of an internal control deficiency depends on
a. Whether there is a reasonable possibility that the company’s controls will fail to prevent
or detect a misstatement of an account balance or disclosure.
b. Whether a misstatement has actually occurred as a result of the deficiency.
c. The magnitude of the potential misstatement resulting from the deficiency or the
deficiencies.
d. Both a and c are correct.
e. All of the above are correct.

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