DEFICIENCY is a shortcoming in an internal control or an opportunity to strengthen internal controls.
INTEGRITY is consistent adherence to an ethical code. If client management lacks integrity the auditor must be more skeptical than usual.
CONTRIBUTION/SALES RATIO (C/S RATIO) is a tool used in profit management. It is important to establish the C/S RATIO: C/S ratio = (Sales revenue - Variable cost of sales)/Sales revenue x 100. If a company achieves a high average marginal profit ratio of say, 40%, it does not mean that it will achieve high profits. The eventual profit will be dependent on the level of fixed costs within the organization.
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