1.

Which of the following matters would an auditor most likely consider to be a significant deficiency or material weakness to be communicated to those charged with governance? 

 1. Managements failure to renegotiate unfavorable long-term purchase commitments.

 2. Evidence of a lack of objectivity by those responsible for accounting decisions. (SD)

 3. Recurring operating losses that may indicate going concern problems.

 4. Current operating policies pre-dated the firms ERP system. (SD)

	A.	1 and 3, but not 2 or 4
	B.	1 and 2, but not 3 or 4
	C.	2 and 4, but not 1 or 3
	D.	1 and 4, but not 2 or 3