6. Significant deficiencies consist of one or a combination of control inadequacies that adversely affect the companys ability to initiate, authorize, record, process, or report external financial data reliably in accordance with the applicable financial reporting framework (GAAP). True ______ False ______

7. When a client uses service organizations such as internet providers or payroll services, the auditor needs to obtain an understanding of the nature and significance of the service that the organization provides and the design and operation of the service organizations controls. True ______ False ______

8. All significant deficiencies and material weaknesses must be communicated to management and the audit committee orally. True ______ False ______

9. Working papers or work papers include a record of the audit procedures performed, audit evidence obtained, and conclusions reached by the auditor. True _______ False ______

10. Internal auditors work for an accounting firm. True ______ False _______