Question

When communicating significant deficiencies in internal control noted in financial statement audit of a nonissuer, the communication should indicate thatA. Fraud or errors may occur and not be detected because of the inherent limitations of internal controlB. The expression of an unmodified opinion on the financial statements may be dependent on corrective follow-up actionC. The deficiencies noted were not detected within a timely period by employees in the normal course of performing their assigned functionsD. The purpose of the audit was to report on the financial statements, not to provide assurance on internal control

Answer 1

A. Fraud or errors may occur and not be detected because of the inherent limitations of internal control.

Step-by-step explanation:

A. Fraud or errors may occur and not be detected because of the inherent limitations of internal control.

When communicating significant deficiencies in internal control noted in the financial statement audit of a nonissuer, the communication should include a statement that fraud or errors may occur and not be detected because of the inherent limitations of internal control. This is because internal control is not foolproof and there is always a risk of fraud or errors occurring. The other options listed are not relevant to the communication of significant deficiencies in internal control.