A Material Weakness in Internal Control Is a Significant Deficiency

question 17

Multiple Choice

A material weakness in internal control is a significant deficiency, or combination of significant deficiencies, that results

• A) From a material misstatement in the financial statements.
• B) In more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected.
• C) In a material misstatement of the financial statements.
• D) In a government having a qualified audit opinion on their financial statements.

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Definitions:

Cost of Goods Manufactured

The total cost incurred to manufacture products, including materials, labor, and overhead, during a specific period.

Finished Goods Inventory

Refers to products that have completed the manufacturing process but have not yet been sold.

Variable Costs

Expenses that vary in direct relation to the volume of production or sales transactions.

Manufacturing Overhead

All production costs other than direct materials and direct labor, including expenses such as maintenance, utilities, and equipment depreciation in a manufacturing setting.