Which of the Following Is Correct with Respect to Control

question 54

Multiple Choice

Which of the following is correct with respect to control deficiencies discovered during an audit?

• A) Auditors must communicate and recommend corrections relating to all material weaknesses in internal control to management.
• B) All material weaknesses in internal control should be reported to the audit committee.
• C) All such matters must be communicated to the audit committee and regulatory agencies.
• D) All control deficiencies are also significant deficiencies.

---

Definitions:

Sales Bonuses

Additional compensation given to employees, usually sales personnel, based on performance and achievement of sales targets.

Ownership

Refers to the legal rights and interests a person or entity has in a property, asset, or business, entitling them to use, manage, and enjoy its benefits.

Owner's Drawings

Withdrawals made by the owner from the business for personal use, considered as a reduction in the equity.

Owner's Capital

The amount of money and assets invested in a business by its owner, minus any withdrawals.