When determining the relevant key considerations when evaluating the severity of a deficiency in a control that directly addresses a risk of material misstatement, the auditor must follow paragraph 25 of the AS 2110.
Paragraph 25 states that “if the auditor identifies a control deficiency in the company’s control environment, the auditor should evaluate the extent to which this control deficiency is indicative of a fraud risk factor”.
In short, the key consideration is the possibility of illegal audit manipulations that lead to incorrect information in financial statements. This is important because fraud is intentional, while material misstatement may also be the result of an unintended error.