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:

Current Ratio

The current ratio is a liquidity ratio that measures a company's ability to cover its short-term obligations with its short-term assets.

Cash

Physical currency owned by a company or individual, including bank notes and coins, often considered the most liquid form of asset.

Stockholders

Individuals or entities that own one or more shares of stock in a corporation, making them partial owners of the company.

Dividend Declaration

The announcement by a company's board of directors of a payment to shareholders, distributed from its earnings.