Discuss how the terms likelihood and magnitude play a role in evaluating the significance of a control deficiency

Control deficiency- exists 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

• The likelihood of an event is a "reasonable possibility" if it is either reasonably possible or probable
• The likelihood is broken down into two categories "remote" or "reasonably possible or probable"
• Magnitude is broken down into three categories "not material or significant", "not material but significant" or "material"