Which of the Following Is Least Likely to Represent a Material

question 32

Multiple Choice

Which of the following is least likely to represent a material weakness in internal control for Flynt Corporation?

• A) Flynt Corporation's computer systems were not working properly for two days; consequently, employees needed to do all reconciliations manually.
• B) Flynt Corporation's CFO was arrested last year for embezzling money from the company.
• C) For the current year, the auditor found a material misstatement in Flynt's sales recognition that was undetected by the internal controls.
• D) Flynt's audit committee is deemed to be ineffective.

---

Definitions:

Sales Revenue

The total income received by a company from its sales of goods or services, before any expenses are subtracted.

Prepaid Expenses

Costs for goods or services that are paid for in advance of being used or consumed, recognized as assets on a balance sheet.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and net income.

Accounts Receivable

Outstanding payments due to a company from its clients for delivered goods or services awaiting compensation.