An Auditor Identified a Significant Deficiency in Internal Control in December.The

question 35

Multiple Choice

An auditor identified a significant deficiency in internal control in December.The client was informed and the client corrected the significant deficiency shortly before year-end (December 31) ;the auditor agrees that the correction eliminated the significant deficiency as of December 31.The appropriate audit report on internal control under a PCAOB Standard No.5 audit of internal control is:

• A)Adverse.
• B)Unqualified.
• C)Unqualified with explanatory language relating to the significant deficiency.
• D)Qualified.

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Definitions:

Suppliers

Businesses or individuals that provide goods or services to another entity, typically within a supply chain or production process.

Industry Rivals

Companies within the same industry that compete with one another for market share and profitability.

Erode Producer Profits

The process by which factors such as increased competition or higher costs reduce the profits that producers can make.

Producer Surplus

The additional revenue producers earn by selling a product at a market price above their minimum acceptable price.