Answer :
1. The likelihood that the deficient control will not prevent or timely detect a misstatement
2. The magnitude of the potential misstatement resulting from the deficiency.
Explanation:
1. The likelihood that the deficient control will not prevent or timely detect a misstatement. When management and auditors are weighing how significant a control deficiency is , the likelihood of a material misstatement occurring as a result of such deficiencies in the control system should be well considered. This is to enable the auditor have a formal idea that once a system or a control is deficient, such could prevent a timely detection of material misstatement.
2. The magnitude of the potential misstatement resulting from the deficiency. Here, the severity of the deficiencies observed must be taken into consideration by the auditor. The reason is to enable the auditor know the impact of the misstatement arising from the deficiencies on his control and risk assessment.
