The Internal Control Deficiencies Identified in a Financial Statement Audit

question 78

Multiple Choice

The internal control deficiencies identified in a financial statement audit may be reported in several ways.Which of the following are not appropriate methods of reporting?

• A)Significant deficiencies are reported in writing to management.
• B)Material weaknesses are reported in writing to the audit committee.
• C)Deficiencies that fail to reach the level of significant deficiencies or material weaknesses may be reported to management.
• D)Significant deficiencies and material weaknesses are reported in writing to both management and the audit committee.

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Definitions:

Marginal Utility

The change in satisfaction or utility that a person receives from consuming an additional unit of a good or service.

Utility-Maximizing

The concept in economics and consumer theory where individuals or firms make decisions that lead to the highest level of satisfaction or benefit within their constraints.

Total Utility

The cumulative satisfaction or usefulness that a person gains from consuming all units of a particular good or service.

Marginal Utility

The supplementary enjoyment or value obtained by consuming an extra unit of a good or service.