CA Sumit has been appointed as statutory auditor of Core Limited. List out some matters that he may consider in determining whether a deficiency or…

Examples of matters that the auditor may consider in determining whether a deficiency or combination of deficiencies in internal control constitutes a significant deficiency The likelihood of the deficiencies leading to material misstatements in the financial statements in the future.The susceptibility to loss or fraud of the related asset or liability.The subjectivity and complexity of determining estimated amounts, such as fair value accounting estimates.The financial statement amounts exposed to the deficiencies.The volume of activity that has occurred or could occur in the account balance or class of transactions exposed to the deficiency or deficiencies.The importance of the controls to the financial reporting process, for example:General monitoring controls (such as oversight of management).Controls over the prevention and detection of fraud.Controls over the selection and application of significant accounting policies.Controls over significant transactions with related parties.Controls over significant transactions outside the entity's normal course of business.Controls over the period-end financial reporting process (such as controls over non-recurring journal entries).The cause and frequency of the exceptions detected as a result of the deficiencies in the controls.The interaction of the deficiency with other deficiencies in internal control.