For each control deficiency below, indicate whether it is a significant deficiency, material weakness or neither. Justify your decision and Indicate to who if anyone, it has to be reported to. a. XYZ Company processes a significant number of routine intercompany transactions on a monthly basis. Individual intercompany transactions are not material and primarily relate to balance sheet activity; for example, cash transfers between business units to finance normal operations. A formal mgmt.. policy requires monthly reconciliation of intercompany accounts and confirmation of balances between business units. However, there is no process in place to ensure performance of these procedures. As a result. Detailed reconciliation of intercompany accounts are not performed on a timely basis. Management does perform monthly procedures to investigate selected large-dollar intercompany account differences. In addition, management prepares a detailed monthly variance analysis of operating expenses to assess their reasonableness. b. ABC Company processes a significant number of intercompany transactions on a monthly basis. Intercompany transactions relate to a wide range of activities, including transfers of inventory with intercompany profit between business units, allocation of research and development costs to business units, and corporate charges. Individual intercompany transactions are frequently material. A formal management policy requires monthly reconciliation of intercompany accounts a confirmation of balances between business units. However, there is no process in place to ensure that these procedures are performed on a consistent basis. As a result, reconciliations of intercompany accounts are not performed on a timely basis, and differences in intercompany accounts are frequent and significant. Mgmt. does not perform any alternative controls to investigate significant intercompany account differences c. UJK Company has a standard sales contract, but sales personnel frequently modify the terms of the contract. The nature of the modification can affect the timing and amount of revenue recognized. Individual sales transactions are frequently material to the entity, and gross margin can vary significantly for each transaction. The entity does not have procedures in place for the accounting function to regularly review modifications to sales contract terms. Although management reviews gross margins on a monthly basis, the significant differences in gross margins on individual transactions make it difficult for management to identify potential misstatements. Improper revenue recognition has occurred, and the amounts have been material