What role does materiality play in classifying the type of control deficiencies

Expert Solution

The concept of materiality means that any material misstatement that may influence the decision making of the users of the financial statements. Materiality is important in determining the audit procedures and the extent to which audit tests have to be carries. A control deficiency usually is a state when the management or the employees of the organization are not able to effectively perform their duties and are not able to detect/ prevent material misstatements. The types of control deficiencies include significant deficiencies and material weakness. If the risk of material misstatement is high then it is classified as a significant deficiencies. A material weakness is a deficiency that will most likely not be detected but the effect will result in serious error or control deficiency.

ekkarill92 answered 1 year ago

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