Which of the Following Is the Most Severe

question 49

Multiple Choice

Which of the following is the most severe?

• A)Material weaknesses in internal control.
• B)Significant deficiencies in internal control.
• C)Operational deficiencies in internal control.
• D)Each is equally severe because it could result in inaccuracies in financial reporting.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed, or the government's claim on earnings.

Income Tax Expense

The amount of income taxes a company expects to pay for the current tax year, accounting for deferred taxes.

Book Income Before Income Tax

The income that a company reports on its financial statements before the deduction of income tax expenses.

Tax Depreciation

The depreciation expense allowed by tax authorities to account for the reduction in value of a tangible asset over its useful life, intended to provide a tax shield for businesses.