AICPA Exam CPA-Auditing Topic 3 Question 54 Discussion

Choice 'b' is correct. A material weakness in internal control is a significant deficiency that results in more than a remote likelihood that a material misstatement in the financial statements will not be prevented or detected.

Choice 'a' is incorrect. The auditor is required to separately identify and communicate significant deficiencies and material weaknesses.

Choice 'c' is incorrect. Significant deficiencies (including material weaknesses) are generally communicated to the appropriate parties after the audit is complete. They may, at the auditor's discretion, be communicated during the audit, but there is no requirement for immediate communication.

Choice 'd' is incorrect. A material weakness is a significant deficiency that results in more than a remote likelihood that a material misstatement in the financial statements will not be prevented or detected. Not all significant deficiencies will meet this description.