Accounting · Auditing and Internal Control
During an audit, numerous deficiencies were found in the sales system that could likely cause material misstatements. A minor, isolated deficiency was also found in the purchases system. According to professional standards, which deficiencies must be included in the formal report to management?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Neither deficiency needs to be reported to management
- 2The deficiencies identified in both the sales and purchases systems
- 3The minor deficiency identified in the purchases system only
- 4The significant deficiencies identified in the sales system only✓
Correct answer
The significant deficiencies identified in the sales system only
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