Which of the Following Is the Correct Definition of "Control

question 51

Multiple Choice

Which of the following is the correct definition of "control deficiency"?

• A) A control deficiency exists if the design or operation of controls does not permit company personnel to prevent or detect misstatements on a timely basis.
• B) A control deficiency exists if one or more deficiencies exist that adversely affect a company's ability to prepare external financial statements reliably.
• C) A control deficiency exists if the design or operation of controls results in a more than remote likelihood that controls will not prevent or detect misstatements.
• D) A control deficiency exists if the design or operation of controls results in a more than probable likelihood that controls will prevent or detect misstatements.

---

Definitions:

Cash Dividend

A distribution of a company's earnings to its shareholders in the form of cash.

Balance Sheet

A financial statement that summarizes a company's financial position at a certain point in time, including assets, liabilities, and shareholders' equity.

Book Value

The net value of a company's assets minus its liabilities, often used to assess the value of a company's shares.

Common Stock

Stocks are financial instruments indicating partial ownership in a firm, granting the holder the right to vote on corporate matters and to earn from the company's earnings via dividends.