Which of the Following Factors Can Mitigate Concerns That the Auditor

question 97

Multiple Choice

Which of the following factors can mitigate concerns that the auditor might otherwise have about a material weakness that was identified at an interim date?

• A) Remediation of the control deficiency after the interim date.
• B) Existence of a compensating control at the year-end date that was also present at the interim date.
• C) Weaknesses in the control environment.
• D) Ineffectiveness of oversight and governance.

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Definitions:

Warranty Cost

Expenses incurred by a company to repair, replace, or refund products that are found to be defective after purchase.

Expense Recognition Principle

An accounting concept that expenses should be recognized in the period when the revenues generated by such expenses are recognized.

Payroll Tax Expense

Payroll tax expense refers to the taxes that employers are required to pay on behalf of their employees, such as Social Security and Medicare taxes in the United States.

Estimated Warranty Costs

The projected expenses a company expects to incur for repairing or replacing products under warranty.