Control deficiency is a deficiency when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis.
Significant deficiency is a control deficiency or combination of control deficiencies that adversely affects the company’s ability to record or report external financial data reliably in accordance with GAAP, such that there is more than a remote likelihood that a misstatement of a company’s annual or interim financial statements that is more than inconsequential will not be prevented or detected. Significant deficiencies will be reported to a company’s audit committee.
