Final answer:
When material weaknesses in internal control exist at year-end during an internal control audit under PCAOB standards, a qualified disclaimer report may be issued.
Step-by-step explanation:
When performing an internal control audit under PCAOB standards, the presence of one or more material weaknesses in internal control at year-end may result in a qualified disclaimer report. This means that the auditor is unable to provide an opinion on the effectiveness of internal control due to significant deficiencies found during the audit.
In a qualified disclaimer: Yes Yes report, the auditor determines that there are material weaknesses in internal control and the financial statements are also materially misstated.
In a qualified disclaimer: No Yes report, the auditor identifies material weaknesses in internal control, but the financial statements are not materially misstated. Finally, in a qualified disclaimer: No No report, the auditor does not find any material weaknesses in internal control and the financial statements are not materially misstated.