Significant Deficiencies Are Matters That Come to an Auditor's Attention

question 49

Multiple Choice

Significant deficiencies are matters that come to an auditor's attention and should be communicated to an entity's audit committee because they represent:

• A)material frauds perpetrated by high-level management.
• B)internal control deficiencies that could adversely affect a company's ability to initiate, record, process, or report external financial statements reliably.
• C)flagrant violations of the entity's documented conflict-of-interest policies.
• D)intentional attempts by client personnel to limit the scope of the auditor's field work.

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Definitions:

Tying

A sales practice where a seller requires the purchase of additional goods or services as a condition for buying a given product.

Profit-Maximizing Price

The profit-maximizing price is the price point at which a business can sell its product or service to maximize its profit margin, given its cost structure and market demand.

Narthex

The entrance or lobby area, typically located at the west end of an early Christian or medieval church, used for gathering before services.

Atrium

The central reception room of a Roman domus that is partly open to the sky. Also, the open, colonnaded court in front of and attached to a Christian basilica.