Deficiency Severity
Classify control-deficiency severity from likelihood and potential magnitude.
Description
Control-deficiency screening combines likelihood and potential magnitude.
Control-deficiency screening combines likelihood and potential magnitude. The category formula is a simplified heuristic.1
Classify control-deficiency severity from likelihood and potential magnitude.
When to use Deficiency Severity
Use this tool to classify control-deficiency severity from likelihood and potential magnitude.
Prepare the documented facts, aligned totals or expected/observed evidence labels requested. Choose applicable requirements and thresholds separately before interpreting a planning screen.
How to use Deficiency Severity and understand its results
- Prepare the documented facts, aligned totals or expected/observed evidence labels requested. Choose applicable requirements and thresholds separately before interpreting a planning screen.
- Enter likelihoodPercent, maximumPotentialMisstatement, materiality, controlFailureSystemic using the field table and calculation rules, then run the tool.
- Read expectedMisstatement, materialityRatio, severity. The explanation below defines the units, signs, ordering and any flags or placeholder values.
- If the tool reports an input issue, correct the values and run it again. Apply the stated assumptions when interpreting a successfully returned result.
| Input field | Meaning | Value type; see rules below | Requirement |
|---|---|---|---|
| likelihoodPercent | Misstatement likelihood (%) | number; minimum: 0; maximum: 100 | Required |
| maximumPotentialMisstatement | Maximum potential misstatement | number; minimum: 0 | Required |
| materiality | Materiality | number; minimum: 0 | Required |
| controlFailureSystemic | Control failure is systemic | boolean | Required |
Enter likelihood 0–100, nonnegative maximum, positive materiality and systemic flag. Systemic with ratio≥1 gives material-weakness; else ratio≥.5 OR likelihood≥50 gives significant-deficiency; else deficiency.
expected=maximum×likelihood%/100; ratio=maximum/materiality Units, indexing, boundary conditions and exceptional cases are defined in the calculation rules above.
| Output field | Meaning | Value type |
|---|---|---|
| expectedMisstatement | Probability-weighted misstatement | number; minimum: 0 |
| materialityRatio | Potential misstatement to materiality | number; minimum: 0 |
| severity | Deficiency severity | string; one of "deficiency", "significant-deficiency", "material-weakness" |
{
"input": {
"likelihoodPercent": 60,
"maximumPotentialMisstatement": 600,
"materiality": 1000,
"controlFailureSystemic": false
},
"output": {
"expectedMisstatement": 360,
"materialityRatio": 0.6,
"severity": "significant-deficiency"
}
}Limitations and assumptions
The expected amount does not drive classification. No governing definition or formal deficiency assessment is established.
Numeric inputs, where present, must be finite. Follow the calculation-specific rules for overflow, underflow and exceptional cases. Missing required fields, extra fields, wrong value types and violations of the calculation rules are input errors.
Alternative or Complementary methods
Use Inherent Risk Score: Combine inherent-risk factors into a weighted score. For a complementary task, use Fraud Severity: Classify potential fraud severity from supplied conduct indicators.
References
-
Deficiency Severity — tool.io
Similar or alternative tools
- Inherent Risk Score
Combine inherent-risk factors into a weighted score.
- Fraud Severity
Classify potential fraud severity from supplied conduct indicators.