Deficiencies in Internal Control Identified by the Auditor That Are

question 40

Multiple Choice

Deficiencies in internal control identified by the auditor that are lesser than significant deficiencies:

• A) Must be communicated to the board of directors, the audit committee, and management.
• B) Must be reported to the audit committee and management.
• C) Must be communicated to management, with the audit committee only informed of the communication to management.
• D) Need not be disclosed unless they in aggregate equal (at least) a significant deficiency.

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Definitions:

Significant Risk

The potential for a substantial negative outcome, affecting health, safety, or the environment.

Shareholders Votes

The rights of shareholders to vote on corporate matters, such as electing directors or approving policies, typically based on the number of shares they own.

Trust Holdings

Assets held in a trust by one party for the benefit of another, including real estate, stocks, bonds, and other investments.

Tax Rate

The percentage at which an individual or entity is taxed on their income or property.