Which of the Following Is the Most Severe

question 49

Multiple Choice

Which of the following is the most severe?

• A)Material weaknesses in internal control.
• B)Significant deficiencies in internal control.
• C)Operational deficiencies in internal control.
• D)Each is equally severe because it could result in inaccuracies in financial reporting.

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Definitions:

Zapata Test

A legal standard used to determine the independence and good faith of a special litigation committee's investigation and recommendations in corporate litigation.

Property Dividend

A type of dividend payment made in assets other than cash, such as stocks or physical assets.

Excess Liquidity

The situation where an organization or individual possesses more cash resources than are necessary for current operations or investments, potentially indicating underutilization of assets.

Common Shareholders

Shareholders who claim the residual profits and assets of a corporation, and usually have the exclusive power and right to elect the directors of the corporation.