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NEW QUESTION: 1
Which of the following best describes the responsibility of the auditor with respect to significant
deficiencies and material weaknesses in an audit of an issuer?

A. Option A
B. Option C
C. Option B
D. Option D
Answer: C
Explanation:
Explanation/Reference:
Explanation:
Choice "B" is correct. In an audit of an issuer, the auditor is required to communicate both significant
deficiencies and material weaknesses to management and the audit committee, but only material
weaknesses result in an adverse opinion on the effectiveness of internal control.
Choice "A" is incorrect. In an audit of an issuer, significant deficiencies (that do not rise to the level of being
material weaknesses) do not result in an adverse opinion on the effectiveness of internal control.
Choice "C" is incorrect. In an audit of an issuer, both significant deficiencies and material weaknesses
must be communicated, in writing, to management and the audit committee. In addition, significant
deficiencies (that do not rise to the level of being material weaknesses) do not result in an adverse opinion
on the effectiveness of internal control.
Choice "D" is incorrect. In an audit of an issuer, the auditor is required to communicate both significant
deficiencies and material weaknesses to management and the audit committee.