You Are Performing the Audit of Internal Control for Clifton

question 53

Multiple Choice

You are performing the audit of internal control for Clifton Company. Which of the following would represent a material weakness in internal control?

• A) The company's audit committee has experienced an unusual turnover of members.
• B) The company's CFO was indicted for embezzling from the company.
• C) Bank reconciliations are done monthly.
• D) The CEO retired after twenty years of service to the company.

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Definitions:

Corrective Actions

Steps taken to eliminate causes of existing nonconformities or undesirable situations to prevent recurrence.

Technological Capabilities

The skills, knowledge, tools, and processes that an organization possesses, which enable it to leverage technology effectively for competitive advantage.

Needs Assessment

A needs assessment is a systematic process for determining and addressing gaps between current conditions and desired conditions or wants, often used for improving a system or service.