Which of the Following Would Most Likely Be Classified as a Material

question 21

Multiple Choice

Which of the following would most likely be classified as a material weakness?

• A)Absence of appropriate separation of duties.
• B)Absence of appropriate reviews and approvals of transactions.
• C)Evidence of failure of control activities.
• D)Ineffective oversight of the financial reporting process by the company's audit committee.

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Definitions:

Break-even Sales

The amount of revenue that must be generated to cover total fixed and variable costs, resulting in zero net income or loss.

Unit Selling Price

The price at which a single unit of a product is sold, determining the revenue generated from sales.

Variable Costs

Costs that vary directly with the level of production or business activity, such as materials and labor.

Operating Income

Earnings before interest and taxes (EBIT), representing the amount of profit realized from a business's operations.