Communicating Internal Control Matters

Free CPA AUD (Auditing & Attestation) lesson in Ethics, Professional Responsibilities and General Principles. 12 min read, ~1,861 words.

AU-C 265 defines three severity levels: control deficiency (design or operation flaw), significant deficiency (merits TCWG attention), material weakness (reasonable possibility of material misstatement). Severity is judged on likelihood times magnitude, evaluating the potential for misstatement, not whether one occurred. Material weakness uses the reasonable possibility threshold, the same standard...

What this lesson covers

• Content
• Example 1
• Example 2
• Common Mistakes
• Check Your Understanding
• Exam Shortcuts

Learning objectives

• I.F2

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