A Material Weakness Occurs When It Is Reasonably Probable or Possible

question 83

True/False

A material weakness occurs when it is reasonably probable or possible that a material misstatement of an account balance or disclosure would not be prevented/detected by an internal control.

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Definitions:

Federal Reserve

The primary banking authority in the United States, tasked with overseeing monetary policy, regulating banks, and providing financial services.

Central Bank

A national financial institution that provides financial and banking services for its country’s government and commercial banking system, and implements the government’s monetary policy.

Regulating Banks

The process of establishing and enforcing rules and standards that govern the banking industry to ensure stability and protect consumers.

Banking System

The banking system consists of a network of banks and financial institutions that provide financial services, including managing deposits, lending, and currency exchange.