When the Auditor Identifies Significant Deficiencies in the Design or Operation

question 113

Multiple Choice

When the auditor identifies significant deficiencies in the design or operation of internal controls, it will be communicated to client's audit committee in the:

• A) audit report.
• B) management letter.
• C) reportable conditions letter.
• D) engagement letter.

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Definitions:

Simple Interest

An interest calculation method where the interest charge is based on the original principal amount of a loan or deposit and does not accumulate or compound.

Annum

A term referring to a year, often used in financial contexts to describe periods of time related to investments or contracts.

Variable Interest Rate

An interest rate that can fluctuate over time based on underlying benchmarks or indexes.

Accrued Interest

Interest that has been incurred but not yet paid, typically referring to the interest accumulating on a bond or loan between payment periods.