What Is the Typical Outcome When an Auditor Discovers a Material

question 20

Multiple Choice

What is the typical outcome when an auditor discovers a material weakness in the design or operation of controls?

• A)An adverse opinion unless management corrects the defect before year-end.
• B)An adverse opinion even if management corrects the defect before year-end.
• C)The firing of the auditors.
• D)Adjusting audit journal entries.

---

Definitions:

Capital Balances

The amount of money that the owners of a business have invested in it, typically represented in the equity section of the balance sheet.

Income and Losses

Represents the financial results of a company's operations, with income meaning the revenues exceeding expenses and losses referring to expenses exceeding revenues.

Capital Interest

The share of ownership in a company or its assets, particularly reflecting the amount invested by owners or shareholders.

Capital Balances

The amounts recorded in the equity section of a company's balance sheet or partnership's accounts, representing the owners' stakes.