Assume that an organization sells software. The sales contracts with the custom

Assume that an organization sells software. The sales contracts with the customers often have nonstandard terms that impact the timing of revenue recognition. Thus there is a risk that revenue may be recorded inappropriately. To mitigate that risk the organization has implemented a policy that requires all nonstandard contracts greater than $1 million to be reviewed on a timely basis by an experienced and competent revenue accountant for appropriate accounting prior to the recording of revenue. Management tested this control and found several instances in which the control was not working. Management has classified this deficiency as a material weakness. Which of the following best describes the conclusion made by management? a. There is more than a remote possibility that a material misstatement could occur. b. The likelihood of misstatement is reasonably possible. c. There is more than a remote possibility that a misstatement could occur. d. There is a reasonable possibility that a material misstatement could occur. e. There is a reasonable possibility that a misstatement could occur.

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