Significant deficiency in internal control over financial reporting means deficiency which is less severe than material weakness yet it is important enough to draw attention of those charged with governance. Any identified significant deficiency should be communicated to management and to those with governance. To describe: The required communication in case of significant deficiency to the management.

Question

Want to see the full answer?

Answer 1

Question

Chapter 6, Problem 6.31P

a.

To determine

Concept Introduction:Significant deficiency in internal control over financial reporting means deficiency which is less severe than material weakness yet it is important enough to draw attention of those charged with governance. Any identified significant deficiency should be communicated to management and to those with governance.

To describe:The required communication in case of significant deficiency to the management.

b.

To determine

Concept Introduction:A material weakness is a deficiency in internal controls which provides that material misstatement in the company’s financial statements will be not prevented or detected on a timely basis. An identified material weakness to be communicated to management and those charged with governance on timely basis.

To describe:Change in communication in case of material weakness.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

The following are various changes in audit circumstances. Audit Circumstance The client began experiencing an increase in returns due to product changes that resulted in increased defects. You found several pricing errors in your substantive tests of transactions for sales. In performing substantive tests of transactions for cash receipts, you found that receipts were promptly recorded in customer accounts, but there were delays in depositing the receipts at the bank. The client entered into a new loan agreement with the bank. Accounts receivable are pledged as collateral for the loan. The client did not reconcile the accounts receivable subsidiary records with the accounts receivable balance in the general ledger on a regular basis. Substantive analytical procedures indicated a significant slowing in accounts receivable turnover. The client entered into sales contracts with new customers that differ from the client’s standard sales contracts. The client had a significant increase in…

Post, CPA, accepted an engagement to audit the financial statements of General Co., a new client. General is a publicly held retailing entity that recently replaced its operating management. In the course of applying audit procedures, Post discovered indicators of fraud. After further investigation, they determined that a warehouse employee was stealing inventory.1) Discuss fraud materiality thresholds and explain whether the specific fraud case outlined above can be considered inconsequential. 2) Discuss Post's responsibilities regarding required communications if the fraud was determined to be:a) Clearly inconsequential.b) Not clearly inconsequential. 3) Discuss auditor obligations regarding client confidentiality and allowed disclosures relating to fraud.

28. Which of the following would be a red flag that internal auditors should look at for the possibility of inventory fraud?I. The controller has assumed responsibility for approving all payments to certain vendors.II. The controller has continuously delayed installation of a new accounts payable system, despite a corporate directive to implement it.III. Sales commissions are not consistent with the organization's increased levels of sales.IV. Payments to vendors are supported by copies of receiving memos, rather than originals. Group of answer choices I and II only II and III only I, II, and IV only I, II, III, and IV I, III, and IV only

Answer 2

Question

Chapter 6, Problem 6.31P

a.

To determine

Concept Introduction:Significant deficiency in internal control over financial reporting means deficiency which is less severe than material weakness yet it is important enough to draw attention of those charged with governance. Any identified significant deficiency should be communicated to management and to those with governance.

To describe:The required communication in case of significant deficiency to the management.

b.

To determine

Concept Introduction:A material weakness is a deficiency in internal controls which provides that material misstatement in the company’s financial statements will be not prevented or detected on a timely basis. An identified material weakness to be communicated to management and those charged with governance on timely basis.

To describe:Change in communication in case of material weakness.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 6, Problem 6.31P

a.

To determine

Concept Introduction:Significant deficiency in internal control over financial reporting means deficiency which is less severe than material weakness yet it is important enough to draw attention of those charged with governance. Any identified significant deficiency should be communicated to management and to those with governance.

To describe:The required communication in case of significant deficiency to the management.

b.

To determine

Concept Introduction:A material weakness is a deficiency in internal controls which provides that material misstatement in the company’s financial statements will be not prevented or detected on a timely basis. An identified material weakness to be communicated to management and those charged with governance on timely basis.

To describe:Change in communication in case of material weakness.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 6, Problem 6.31P

a.

To determine

Concept Introduction:Significant deficiency in internal control over financial reporting means deficiency which is less severe than material weakness yet it is important enough to draw attention of those charged with governance. Any identified significant deficiency should be communicated to management and to those with governance.

To describe:The required communication in case of significant deficiency to the management.

b.

To determine

Concept Introduction:A material weakness is a deficiency in internal controls which provides that material misstatement in the company’s financial statements will be not prevented or detected on a timely basis. An identified material weakness to be communicated to management and those charged with governance on timely basis.

To describe:Change in communication in case of material weakness.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 6, Problem 6.31P

a.

To determine

Concept Introduction:Significant deficiency in internal control over financial reporting means deficiency which is less severe than material weakness yet it is important enough to draw attention of those charged with governance. Any identified significant deficiency should be communicated to management and to those with governance.

To describe:The required communication in case of significant deficiency to the management.

b.

To determine

Concept Introduction:A material weakness is a deficiency in internal controls which provides that material misstatement in the company’s financial statements will be not prevented or detected on a timely basis. An identified material weakness to be communicated to management and those charged with governance on timely basis.

To describe:Change in communication in case of material weakness.

Answer 6

Chapter 6, Problem 6.31P

a.

To determine

Concept Introduction:Significant deficiency in internal control over financial reporting means deficiency which is less severe than material weakness yet it is important enough to draw attention of those charged with governance. Any identified significant deficiency should be communicated to management and to those with governance.

To describe:The required communication in case of significant deficiency to the management.

Answer 7

Chapter 6, Problem 6.31P

a.

To determine

Concept Introduction:Significant deficiency in internal control over financial reporting means deficiency which is less severe than material weakness yet it is important enough to draw attention of those charged with governance. Any identified significant deficiency should be communicated to management and to those with governance.

To describe:The required communication in case of significant deficiency to the management.

Answer 8

b.

To determine

Concept Introduction:A material weakness is a deficiency in internal controls which provides that material misstatement in the company’s financial statements will be not prevented or detected on a timely basis. An identified material weakness to be communicated to management and those charged with governance on timely basis.

To describe:Change in communication in case of material weakness.

Answer 9

b.

To determine

Concept Introduction:A material weakness is a deficiency in internal controls which provides that material misstatement in the company’s financial statements will be not prevented or detected on a timely basis. An identified material weakness to be communicated to management and those charged with governance on timely basis.

To describe:Change in communication in case of material weakness.

Answer 10

Expert Solution & Answer

Answer 11

Expert Solution & Answer

Answer 12

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 13

Ch. 6 - Prob. 6.1RQ Ch. 6 - Prob. 6.2RQ Ch. 6 - Prob. 6.3RQ Ch. 6 - Prob. 6.4RQ Ch. 6 - Prob. 6.5RQ Ch. 6 - Prob. 6.6RQ Ch. 6 - Prob. 6.7RQ Ch. 6 - Prob. 6.8RQ Ch. 6 - Prob. 6.9RQ Ch. 6 - Prob. 6.10RQ

Solution Summary: The author explains that significant deficiency in internal control over financial reporting is less severe than material weakness but important enough to draw attention of those charged with governance.

Want to see the full answer?

Chapter 6 Solutions