Internal controls are policies and procedures defined by the management to ensure the smooth functioning of the business processes. Internal controls ensure the complete and correct accounting and safeguards to the assets. Deficiencies are failure of the internal control to perform effectively. The auditor decides if the deficiency is significant deficiency for his planning of the audit procedures. To choose: The reason for communication of significant control deficiencies and material weaknesses to the audit committee.

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Chapter 6, Problem 6.22MCQ

To determine

Concept Introduction:

Internal controls are policies and procedures defined by the management to ensure the smooth functioning of the business processes. Internal controls ensure the complete and correct accounting and safeguards to the assets.

Deficiencies are failure of the internal control to perform effectively. The auditor decides if the deficiency is significant deficiency for his planning of the audit procedures.

To choose: The reason for communication of significant control deficiencies and material weaknesses to the audit committee.

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