Which of the Following Statements Regarding Audit Findings Is

question 43

Multiple Choice

Which of the following statements regarding audit findings is ?

• A) A significant deficiency is a deficiency in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis.
• B) A material weakness is a deficiency in internal control important enough to merit attention by those charged with governance.
• C) A deficiency exists when the design or operation of a control does not allow management or employees to prevent, or detect and correct misstatements on a timely basis.
• D) All of the above are true.

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Definitions:

Motivational Arousal

The process of being internally stimulated to perform an action or behavior due to personal drive or desire.

Physiological Needs

Basic life needs required for human survival, such as air, water, food, shelter, and sleep, according to Maslow's hierarchy of needs.

Drive-Reduction Theory

A psychological concept proposing that the motivation of behavior is the reduction of drives, which are primarily biological needs that trigger arousal.

Aroused State

A condition of heightened physiological and psychological activity, with increased heart rate, alertness, and energy, often triggered by excitement or stress.