Question

The most common account-specific material weakness occurs in which account?

-Current accrual account.
-Accounts receivable.
-Revenue accounts.
-Inventory accounts.
-None of the above.

Answer 1

The most common account-specific material weakness occurs in the Accounts receivable account.

Step-by-step explanation:

The most common account-specific material weakness occurs in the Accounts receivable account. Material weaknesses are significant deficiencies in a company's internal control over financial reporting that could result in a material misstatement in the financial statements. In the case of accounts receivable, a material weakness may occur if there are inadequate controls in place to ensure the accuracy, completeness, and timeliness of recording and collecting receivables.

For example, if a company lacks proper procedures to verify the creditworthiness of customers, monitor overdue accounts, or reconcile aging schedules, it may lead to the understatement or overstatement of accounts receivable in the financial statements, resulting in a material weakness.