Material Weakness
What is Material Weakness?
A significant deficiency in internal controls that creates a reasonable possibility of a material misstatement not being prevented or detected.
Frameworks that govern material weakness
What the standards actually require on material weakness
Requirements naming material weakness across 5 standards, quoted from the control text.
In addition to the audited financial report, each insurer must furnish the commissioner a written communication, prepared by the accountant within sixty days after the filing of the audited financial report, describing any unremediated material weakness in int...
naic-annual-financial-reporting-model-regulation-model-audit-rule-mdl-205::mdl205-s11-material-weaknesses · File the accountant's communication of unremediated material weaknesses within sixty days of the audited report, with the insurer's remediation description →Per PCAOB AS 2201 paragraphs 62-69: deficiency evaluation + classification + communication. Requirements include (a) evaluate Deficiencies including severity considering likelihood + potential magnitude + compensating controls + (b) classify deficiencies as de...
ASTWO-7 · Deficiency Evaluation, Material Weakness, and Communication →The entity must fix material weaknesses in operational risk management, including gaps, weaknesses and failures in controls. Remediation needs clear accountability and assurance, has to tackle root causes promptly, and identified control gaps, weaknesses and f...
apra-cps-230-operational-risk-management::30 · Para 30 Remediate material weaknesses and keep them in the risk profile until fixed →The entity must tell APRA promptly, and at the latest within 10 business days of becoming aware, of any material weakness in its information security controls that it does not expect to be able to remediate in good time.
apra-cps-234::36 · Para 36 Notify APRA of material control weaknesses within 10 business days →Internal IT auditors assess the controls, reliability and integrity of the IT environment independently and objectively: they evaluate IT plans, strategies, policies and procedures for management oversight, test day-to-day IT controls for compliance with accou...
ffiec-it-examination-handbook::AUD-04 · Internal IT Audit Staff (Audit) →Questions people ask about material weakness
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