Question

A control deficiency that is less severe than a material weakness, but important enough to merit attention by those responsible for oversight of the company's financial reporting is referred to as a(n):

1) Internal control
2) Audit finding
3) Control risk
4) Significant deficiency

Answer 1

A control deficiency warranting attention but less severe than a material weakness is called a significant deficiency. This term is used in the context of financial reporting and oversight. Significant deficiencies must be addressed to ensure the accuracy of financial statements.

Step-by-step explanation:

A control deficiency that is less severe than a material weakness, but important enough to merit attention by those responsible for oversight of the company's financial reporting, is referred to as a significant deficiency. It is not an internal control, audit finding, or control risk itself but rather a term used to describe an issue with the internal controls that needs to be addressed. Although it is less critical than a material weakness, it still requires corrective action to prevent misstatements in the financial statements.