Significant Deficiencies Are Matters That Come to an Auditor's Attention

question 28

Multiple Choice

Significant deficiencies are matters that come to an auditor's attention that should be communicated to an entity's management and those charged with governance because they represent:

• A) Disclosures of information that significantly contradict the auditor's going concern assumption.
• B) Material fraud or illegal acts perpetrated by high-level management.
• C) Deficiencies in the design or operation of internal control that could reasonably be expected to cause a non-inconsequential misstatement in the financial statements.
• D) Manipulation or falsification of accounting records or documents from which financial statements are prepared.

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Definitions:

Lever Pressing

A method used in experimental psychology to measure the behavior of animals, typically involving the animal learning to press a lever to receive a reward.

Food Pellets

Small, compressed units of food often used in laboratory experiments as a reward for animals.

Intermittent Reinforcement

A conditioning schedule in which rewards or punishments are given out at irregular intervals, making the response more resistant to extinction.

Continuous Reinforcement

A method of learning that involves providing a reward after every correct response to ensure the behavior is reinforced.