Which of the following conditions most likely indicates the existence of significant deficiency in internal control over financial reporting?
a. The auditor obtains evidence of a material misstatement resulting from a missing control.
b. There is a deficiency, or combination of deficiencies, that is less severe than a material weakness, yet important enough to communicate to those charged with governance.
c. There is a reasonable possibility that a material misstatement in the financial statements could occur.
d. The auditor detects fraud committed by senior management.
Answer: B
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